‘The evidence suggests that most retirees are prudent in their drawdown behaviour. Less than 30 per cent of superannuation benefits are taken as lump sums. When retirees do take lump sums, they are most frequently used to pay down debt, invest in income stream products, and purchase durable goods that are used throughout retirement.
‘Lump sum use is not uniform, and is most prevalent among those with low superannuation balances (less than $10 000). These households tend to take between half and all of their superannuation assets as a lump sum. The evidence suggests that this behaviour has little impact on Age Pension reliance.
‘In undertaking its analysis, the Commission has identified a range of policy areas that warrant further and collective attention. These include:
- how involuntary retirement impacts policy outcomes;
- the way in which incentives inherent in the retirement income system affect individuals’ savings and retirement decisions;
- how the retirement income system can better cater for the diverse circumstances and needs of retirees, particularly in the drawdown stage where ‘one size’ never fits all;
- how to best manage longevity risk given the demographic transition underway.
(Introduction, Productivity Commission Report, 7.7.15)
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