The Actuaries Institute based its view on two studies: one from Plan for Life and commissioned by the Retirement Incomes Working Group of the Actuaries Institute, and the other on Australian Tax Office data provided to the CSIRO.
It predicts that an increasing number of retirees will run down their super accounts completely by drawing down more than 10 per cent of their balances, putting further pressure on the federal budget and the age pension.
While this only currently accounts for around 5 per cent of SMSF balances, the Actuaries Institute believes the number will grow in the future as the population ages.
“This is because, between the ages of 75 and 85, about a fifth of balances are being drawn down at more than 10 per cent of their balances, which is not sustainable for those who live longer than average,” the institute said in a statement.
The minimum drawdown is 6 per cent for those under 80 and 7 per cent for those over 80.
Retirement Incomes Working Group convener Anthony Asher said the data confirms research from other sources that say a significant minority of retirees have, in recent years, run out of retirement savings before death.
“The next step is to understand why. It could be intentional and a natural step as their income needs decline, such that the age pension is sufficient at older ages,” Mr Asher said.
“On the other hand, they may have lost money due to dementia, financial abuse of some kind or poor decision-making.”