Some new retirees still plan to take only the minimum
Median super balances are projected to rise from about $200,000 in 2024 to almost $450,000 over the next decade. Aware Super says some retirees could draw an extra $24,700 in their first year by changing how they use that money.
The fund’s modelling found a couple retiring in 2036 with median super balances and owning their home outright could lift first-year retirement income from $63,700 to $88,400 a year, on 21 September 2026’s dollars, by using what Aware Super calls a “maximised to last” retirement income strategy.
Aware Super says the approach aims to show retirees how much they can spend each year while keeping confidence that their money will last through retirement.
Chief executive Deanne Stewart said larger balances alone would not improve retirement outcomes if people were too worried to use their savings.
“For decades, Australians have been taught the importance of saving, now we need to help them feel confident to spend those savings in a way that supports the retirement they worked so hard for,” Stewart said.
Aware Super says almost half of new retirees plan to draw down only the legislated minimum income because of what it calls “fear of running out”, or FORO.
Retirement Manager lifts drawdown rates
According to Aware Super, 54% of members who opened a retirement income account typically chose to draw down more than the minimum income amount.
That share rose to 63% among members who used Retirement Manager, the fund’s digital planning tool.
Stewart said tools like that can help members build a personal income and spending plan and feel more comfortable drawing more from their super in retirement.
The Intergenerational Report projections cited by Aware Super point to much larger balances for future retirees. However, the fund argues better guidance, tools and support will still matter if Australians are to turn those balances into retirement income.
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