The government’s Intergenerational Report (IGR) released on Monday projects that expenditure on health and aged care will increase from a combined 5.3 per cent to 8.3 per cent in 2060-61. It also projects that the proportion of the population aged 65 and over will rise over from 16 per cent to 23 per cent over the next 40 years.
“This report highlights the importance of superannuation for Australian retirees who face higher medical and aged care costs in the coming decades,” ASFA chief executive, Dr Martin Fahy, said.
“In the 1970s Australia counted seven workers for every retiree. That’s set to drop to less than three workers per retiree by 2060.”
The IGR also predicts that the median superannuation balance at retirement will increase from around $125,000 to over $460,000 by 2060 on the back of the SG increasing to 12 per cent.
“With more Australian retirees having higher super balances, the proportion of retirees reliant on the Age Pension will decline and ASFA expects half of all Australians to be self-funded in their retirement by 2050,” Dr Fahy said.
“Our strong superannuation system will allow Australia to lower the burden of the Age Pension from the current 2.7 per cent of GDP to 2.1 per cent in 2060-61 making it the lowest among our OECD peers.”
