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The retirement puzzle

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  • Ummul Ruthbah

Abstract

The present-day retirees may not be as well off as they expect to be during their retirement. Given the current state of the world – higher life expectancy, close to zero real interest rate and the economic turmoil caused by Covid-19 pandemic, a superannuation balance as large as $545,000 may not be enough to support a comfortable lifestyle. Besides, the means-tested age pension results in cases where spending at retirement does not increase proportionally with assets, providing incentives for a broad spectrum of people to deplete their superannuation in the early years of retirement, with significant negative consequences for government finances. JEL Classification : G17, G18, G51, H55

Suggested Citation

  • Ummul Ruthbah, 2022. "The retirement puzzle," Australian Journal of Management, Australian School of Business, vol. 47(2), pages 342-367, May.
    • Handle: RePEc:sae:ausman:v:47:y:2022:i:2:p:342-367
    DOI: 10.1177/03128962211014577
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    References listed on IDEAS

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    More about this item

    Keywords

    Comfortable retirement; longevity; means-tested age pension; superannuation;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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