What does the future hold for your super savings and the super savings of Australia? Superannuation consultant and actuary Rice Warner has taken a look into the long-time future of Australian super and come up with some fascinating - but perhaps not overly surprising findings.
Crucially, these findings should help serve as yet another wake-up call for Australian's who are lagging with their super savings.
But fortunately there are reassuring expectations by Rice Warner that Australians will become much more responsible in the way they receive their super money upon retirement.
First, the latest Rice Warner's Superannuation Market Projections Report, released late last week, forecasts that over the next 15 years, Australia's total super savings will multiply by almost three times to $3.2 trillion-plus (in 2007 dollars).
Given Australia's rapidly ageing population, Rice Warner expects that 39% of these super savings will be then held by retirees.
But what about balances? Rice Warner expects average fund balances to grow over the next 15 years from $74,700 in June 2007 to $118,600 (again in 2007 dollars). The report emphasises that it is referring to the dollars held in ALL super accounts - meaning that the calculation includes multiple super accounts held by members.
Australia's traditional fondest for receiving their super in lump sums - only leaving themselves with the task of reinvesting the money or facing the risk of unsustainable spending - is on the way out.
"There will be a significant shift from lump sums to pensions as members choose to maintain their benefits in a tax-free environment," according to the report. Further, members over 60 who still in the workforce will increasingly use transition-to-retirement pensions.
And the revamping of Australia's super system from July this year will really super-charge voluntary super savings. Rice Warner estimates that these changes alone will increase the superannuation market by a breathtaking 60%.
16th-December-2007 | 