Social security a thorn in robust retirement system
Australia ranks sixth in the world for retiree wellbeing but the country's generous social security scheme is its Achilles heel, according to an asset management firm index.
Natixis Global Asset Management's 2016 Global Retirement Index showed Australia ranked sixth out of 43 nations in the world when looking the ability of systems in countries to meet retirees' needs, and Australia was praised for its best practice record on the world stage.
It looked at factors that offered retirement security and provided a comparison tool for best practice in public, fiscal, and retirement policies.
However, the report said there was a risk for the generous social security system to affect Government expenditure and the national deficit level.
The index revealed the score for material wellbeing (retirees' ability to support themselves based on income per capita) could still improve, and cited a requirement for greater engagement with superannuation.
Managing director for Natixis in Australia, Kevin Haran, said: "As per recent surveys from Natixis1, investors worldwide recognise that retirement responsibility increasingly land on their shoulders".
On the upside, Australia's governance and low interest rate environment boosted its ranking in overall finances in retirement (fifth overall), while government indebtedness and low inflation rates were also a positive for the purchasing power of retirees.
However, in terms of its material wellbeing score, it fell to 16th position. Material wellbeing measures retirees' ability to support themselves in retirement based on income per capita, unemployment, and income equality.
The GRI, which began in 2013, mainly focused on finances in retirement to score countries, but also considered material wellbeing, health, and a quality of life to provide a holistic picture.
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