Retirees still hesitant to make super drawdowns
The majority of retirees are still only drawing down the minimum legislated rate of their superannuation, according to new research.
This is despite the lifting of the 50 per cent drawdown regulations put in place during the pandemic.
The research commissioned by Super Consumers Australia found that 61 per cent of retirees are accessing their super draw down at the minimum legislated rate last financial year.
Survey results found the reason for this was that most of these retirees are confident that this minimum is sufficient for their needs.
Just over 50 per cent stated they have no desire to spend more, while 37 per cent said they made the decision following expert advice. However, 19 per cent of retirees who were drawing down at the minimum rate said they thought it was a government recommendation.
Gerard Brody, acting director of Super Consumers Australia, said this misconception highlighted a gap in understanding of how the retirement system works.
“The research clearly shows that about half of older Australians did not have a good grasp of the tax exemptions applicable to superannuation during retirement,” he said.
“The retirement system is complex, demanding consumers to possess high levels of knowledge and engagement to maximise their retirement outcomes.”
However, he said, the research found that only 43 per cent of older Australians have sought some kind of advice about money in retirement, and only 21 per cent expressed trust in advice from a super fund.
“As the government seeks ways to enhance retirement outcomes, it should begin by having an independent agency link Australia’s government-provided retirement planning services and tools on one website,” he said.
“Additionally, there’s a pressing need for consumer protections to make the retirement system safer for everyone, including default products and performance testing, mirroring the safeguards in the accumulation phase.”
