The Australian Bureau of Statistics (ABS) has today released further data from its 2013-14 Household Income and Wealth survey, which reveals that retirees are increasingly choosing income streams over superannuation lump sums:
Bjorn Jarvis, the Program Manager of the ABS’ Labour and Income Branch reported that almost 1.2 million people were receiving an income stream from their superannuation in 2013-14, at an average of $502 per week.
“Of that 1.2 million, about three quarters were aged 65 years or over and one quarter were between 55 and 64 (876,000 and 307,000, respectively),” said Mr Jarvis.
“This means just over one in four people aged 65 years and over (excluding those in nursing homes and retirement villages) were receiving a superannuation income stream in 2013-14, up from one in five in 2003-04.”
Mr Jarvis also said that in 2013-14, 420,000 people reported they had withdrawn a lump sum from their superannuation in the previous two years. Half were for amounts less than $25,000.
“Three quarters of people used the lump sum to invest in their home, make other investments, buy or pay off a vehicle, or to pay off outstanding debts. For the other one quarter, the most commonly cited reasons were for holidays, followed by general living and medical expenses,” said Mr Jarvis.
The number of people with some superannuation and the average value of their accounts have both grown in the 10 years to 2013-14.
In 2003-04, around two-thirds (64 per cent) of people aged 15 years and over, had superannuation. By 2013-14, this had risen to 71 per cent, with about 85 per cent of people aged 25 to 54 years having superannuation. For people with superannuation, the average value of their accounts increased in real terms from $68,000 to $110,000.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
