Renters need more superannuation

CPA Australia has released its third Superannuation – the right balance? report.

The figures showed that renters need more superannuation than homeowners in retirement, particularly if they are single.

Prior to retirement, renters and home owners tend to have similar housing costs, because rent and mortgage payments absorb about the same proportion of income.

In retirement, however, homeowners tend to own their homes outright, so they fare better than renters at this stage of life.

Indeed, renters, on average, are 17% worse off with single renters barely managing a modest but adequate lifestyle in retirement.

The report also evaluates the impact of Australia’s simplified superannuation changes from 1 July 2007.

Adequate retirement savings will still only be a reality under ideal conditions where individuals enjoy 40 years of compulsory superannuation contributions and are in a position to make voluntary savings.