An Analysis of Household Retirement Adequacy In Australia

21 Pages Posted: 2 Jan 2019

See all articles by John R. Evans

John R. Evans

Centre for Analysis of Complex Financial Systems

Abdul Razeed

The University of Sydney

Date Written: December 17, 2018

Abstract

Australia has a three-pillar based retirement system consisting of the Superannuation Guarantee Levy (SGL), Private Savings and the Age Pension. The purpose of this paper is to assess the impact on the retirement standard of living of Australian households by considering all of the components of the retirement system as well as allowing for the volatility of the economic variables that affect the pre-retirement and post-retirement phases. The analysis is based on the household unit and therefore covers Australians as a whole, and not only those in employment and receiving SGL contributions. The results indicate that the integrated retirement system can be expected on the assumptions made to provide an acceptable standard of living in retirement until quite advanced ages. The results also show that the overall system is not well integrated, and even when the SGL system is mature, the typical Australian household will still access at least a partial Age Pension, and most likely the full Age Pension in retirement.

Keywords: Superannuation Guarantee Levy, Retirement Adequacy, Capital Market Shocks, Econometric Modeling, Australian Age Pension

JEL Classification: G17, G18

Suggested Citation

Evans, John R. and Razeed, Abdul, An Analysis of Household Retirement Adequacy In Australia (December 17, 2018). Available at SSRN: https://ssrn.com/abstract=3302331 or http://dx.doi.org/10.2139/ssrn.3302331

John R. Evans (Contact Author)

Centre for Analysis of Complex Financial Systems ( email )

PO Box 363
Summer Hill, 2130
Australia

Abdul Razeed

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
152
PlumX Metrics