‘Lump sum culture’ reliance is an exaggeration
A new index has found that 83.3 per cent of retirement assets were taken as income streams last financial year, contrasting the view that half of all benefits are paid as lump sums.
The Colonial First State Income Stream Index launched on Tuesday measures the percentage of retirement assets taken as income streams rather than lump sums.
The index is derived from Rice Warner's dataset and found more than $80 of every $100 paid as a retirement benefit is taken as a pension.
"This analysis suggest that Australians' reliance on lump sums in super is an exaggeration and adds a new dimension to the debate about compelling Australians to take an income stream in retirement," Colonial First State executive general manager, Linda Elkins, said.
"The index is consistent with our observations of our account-based pensions clients, who tend to be conservative and sensible in how they manage their retirement income," Elkins said.
Rice Warner chief executive, Michael Rice, said the data found a stronger preference for income streams as balances grew.
"We estimate that as the superannuation system matures, 96 per cent of all retirement assets will be taken as income streams by 2025," he said.
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