How can we best ensure that retirement incomes are adequate?

The present superannuation contribution (SG) rate of 9.5 percent can finance an adequate retirement income for most middle-income people, provided they fully draw down their savings. Logically, therefore, any action to stop further increases in the SG rate should be contingent on accompanying policies to remove the present impediments to using retirement savings efficiently.

The recently released Report of the Review of Retirement Incomes found that “The Australian retirement income system is effective, sound and its costs are broadly sustainable”.

For low income earners, it comes as no surprise that the age pension ensures an adequate retirement income sufficient to maintain a standard of living…