Only 20% of full-time indigenous workers will have enough superannuation to provide a comfortable standard of living in retirement, new research indicates.
According to research by the CSIRO-Monash Superannuation Research Cluster Program there is a 27% retirement wealth gap for indigenous males and 39% for indigenous female workers compared to the median non-indigenous male worker.
“Our study of the lifetime impact of earnings differences on retirement outcomes shines a spotlight on the extent to which disparity in income levels today results in a significant retirement wealth gap after a 40-year career,” said Associate Professor Rob Bianchi.
According to the ABS the indigenous weekly income is 23% lower than the comparable non-indigenous income.
Based on the ASFA retirement standard the research estimates that only 20% of indigenous Australians will be able to fund a satisfactory standard of living in retirement, compared to around 33% of non-indigenous Australians.
“Our research indicates that while the mean superannuation balance for non-indigenous Australians at retirement is 15% lower than what is required for a comfortable retirement, the mean balance for indigenous Australians is 46% lower than this critical level” said Assoc. Prof. Bianchi.
“This means that a significant proportion of indigenous full-time workers will still need some form of government assistance to provide even a modest retirement income,” he said.
“Our results also indicate that indigenous males will retire with a superannuation balance that is very similar to that of the non-indigenous female worker who faces a retirement gap of 28% relative to that of the male non-indigenous worker.”
“Indigenous females will achieve the lowest average retirement outcomes and potentially face the biggest financial challenges in retirement.”
“Closing the income and life expectancy gaps between indigenous and non-indigenous Australians will significantly improve the retirement outcomes for indigenous Australians.”
“Policies that can improve the education, employment and income outcomes of indigenous Australians will translate directly into higher levels of superannuation savings for these individuals.”
“Policies designed to increase the life expectancy of indigenous Australians will also extend the non-working phase for these individuals who are more likely to experience a shortened retirement.”
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