Australia's retirement income system is unlikely to deliver a comfortable standard of living for the majority of Australian retirees, research released by the Association of Super Funds of Australia (ASFA) has revealed.
"We need a retirement income system where we see super properly integrated with the Age Pension and the tax system," ASFA chief executive Pauline Vamos said.
"We have an opportunity now, with the Henry Review [a Government review of the Australian tax system], to develop a system that is going to better assist people in achieving the lifestyle they want when they decide to stop working."
Australia's Age Pension provides for a very limited and low-cost retirement lifestyle, and while compulsory superannuation has made a substantial contribution, most workers still fall short of what they want and expect, Vamos said.
"More needs to be done, either through encouragement of voluntary contributions by way of an enhanced co-contribution or other government payment, or through the introduction of soft compulsion," she said.
"There is no doubt that the Age Pension will continue to play a significant role in meeting the basic retirement needs of Australians.
"Relying on it as a sole or major source of retirement income, however, is not to be recommended, especially as our life expectancy continues to climb."
The full Age Pension as at 20 September 2008 was $14,655 for a single person and $24,481 for a couple. According to ASFA, this falls short of the $19,617 a single person requires and the $27,454 a couple needs for a modest lifestyle in retirement.
