Half of all Australians will be self-funded in their retirement by 2050, according to the Association of Superannuation Funds of Australia (ASFA).
Pointing to the Government’s Intergenerational Report, the association said Australians would be looking to their super to do the heavy lifting for retirees who faced higher medical and aged care costs in the coming decades.
The report projected government expenditure on health and aged care to increased from a combined 5.3% of gross domestic product (GDP) in 2019-20 to 8.3% in 2060-61.
ASFA said the report noted that with the superannuation guarantee (SG) rising to 12% and more workers contributing to super for longer, the median super balanced at retirement would increase from $125,000 to over $460000 by 2060.
ASFA chief executive, Dr Martin Fahy, said: "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.
"Our strong superannuation system will allow Australia to lower the burden of the Age Pension from the current 2.7% of GDP to 2.1% in 2060-61 making it the lowest among our OECD peers.”