8: Retirement income
Australians save for retirement during their working years. When they retire, they use their accumulated wealth to generate income and help manage risks over the remainder of their lives. They require appropriate financial products and services to help them achieve their retirement goals.
There is an opportunity for financial and policy innovation to deliver better outcomes for retirees and assist Australia to meet the challenge of an ageing population. This chapter explores some of the weaknesses of the retirement income system and impediments to the development of new products. In particular, longevity risk is not currently managed efficiently.
The Inquiry has made the following observations about Australia’s retirement income system:
- The retirement phase of superannuation is underdeveloped and does not meet the risk management needs of many retirees.
- There are regulatory and other policy impediments to developing income products with risk management features that could benefit retirees.