Half of retirees taking lump sum payments
Of the 2.3 million superannuation members retired from the labour force, over half received all or part of their superannuation money as a lump sum, according to the Australian Bureau of Statistics.
The 2016-17 Multipurpose Household Survey based on data for the 2016/17 financial year indicated that of the 2.3 million retirees aged 45 years or over that had made contributions to a superannuation scheme, 52 per cent had received all or part of their superannuation funds as a lump sum.
“Many of those who received a lump sum payment used it to pay off or improve their existing home or purchase a new home,” the survey said.
The survey revealed that 36 per cent of men, and 32 per cent of women used their lump sum for these purposes.
Many members also reinvested their lump sum payment into a bank account, personal savings or other investment with 21 per cent of men and 19 per cent of women using their lump sum payment in this way.
“Some cleared other outstanding debt at 19 per cent of men and 17 per cent of women, or invested in an approved deposit fund, deferred annuity or other superannuation scheme at 18 per cent of men and 13 per cent of women,” the ABS said.
The survey also indicated that for men who have retired, commonly reported main sources of personal income is government pension or allowance at 49 per cent, and superannuation, annuity or allocated pension at 33 per cent.
“For women who have retired, commonly reported main sources of personal income is also government pension or allowance at 45 per cent, and superannuation, annuity or allocated pension 17 per cent.”
The survey also indicated that the age at which Australians intend to retire has edged higher.
ABS chief economist Bruce Hockman said on average in 2016/17, Australians aged 45 years and over were intending to continue in the labour force until 65 years of age, up from 63 years a decade ago.
“This is consistent with the continuing trend of people staying in the workforce for longer,” said Mr Hockman.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.