Most retirees not restructuring assets to get pension
RETIREES are being prudent in the way they draw down their superannuation with a report showing most older Australians are not restructuring assets to gain access to the Age Pension.
The Productivity Commission report, Superannuation Policy for Post-Retirement, explores when and how people access their super and examines what may happen if the age that individuals can access their superannuation - the preservation age - is raised.
The report found most retirees are prudent in the way they draw down on their superannuation and, while the use of lump sums attracts much attention, they are not problematic.
Researchers examined whether individuals altered their draw down well in advance of the Age Pension age to gain access to the payment and found little evidence that individuals were acting strategically.
Factors - such as experiencing the onset of disability - are the reasons why some draw down early and exhaust their superannuation savings.
Where lump sums are taken, they are most frequently used to pay down debt, invest in income stream products, and purchase durable goods for use in retirement.
Less than 30 per cent of superannuation benefits are taken as lump sums, with most superannuation benefits taken as income streams.
"The current body of research suggests that the practice of restructuring assets in order to gain access to the Age Pension is not widespread," the report said.
National Seniors chief executive Michael O'Neill said the Productivity Commission report confirmed that people in or near retirement were attuned to the issue of longevity.
"Having scrimped and saved all their lives, Australians are not blowing their super lump sums on luxury holidays."
"We accept that as the pension age rises the preservation age will inevitably follow suit.
Courtesy: National Seniors