Pension contributors in the group what is called “middle Australia” are currently struggling, retirees who want to lead a healthier lifestyle than the Age Pension provides, with the added cost of medical care.
“When you retire, your paycheck stops. From now on, you need to finance your lifestyle using your own savings plus any Age Pension income you may be eligible for,” explains Senior Actuary Jim Hennington.
In accordance with legislative changes adopted in February 2022, pension funds must implement a new retirement income strategy and publish it by July 1, 2022. The strategy should indicate how they find a balance between three main following goals:
- Maximization of expected retirement income;
- Risk management;
- Flexible access to expected funds at the time of retirement.
Mr. Hennington says the Retirement Income Agreement lays on the Superfund. “The new strategy comes with some risks, but the biggest risk for retirees today is the risk of longevity,” he said.
The paper states that future retirees can choose to invest in an indexed retirement annuity or leave it in the Superfund. These products are a secure investment option available to members of the entire system.
Photos are from open sources.
