Account Based Pensioner Priorities and Statistics

Account-based pensions are one way your superannuation can be delivered to you once you retire. So it pays to be shrewd about looking for outstanding value.

From January to the end of June, more than 4,500 people visited our site to compare account-based pensions specifically. By analysing the thousands of search entries on our account-based pensions comparison table, we can reveal some interesting stats about what Australians want to get out of their super fund’s pension account once they retire.

It turns out Aussie retirees or pre-retirees are generally shrewd and savvy when it comes to looking for outstanding value in an account-based pension.

 

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Data is based on more than 4,500 visitors who compared account-based pensions on the CANSTAR website between 1 January and 30 June, 2016. The percentage values represent the distribution of usage for each filter (faceted search bar) or selector.

Balance Statistics

Australians appear to be doing pretty well at preparing for retirement. 37.24% of people who compare account-based pensions on our site have a balance of $550,000 and over. 27.93% have between $250,000 and $550,000.

34.83% of visitors to our site report having $250,000 or less. This is not considered an ideal situation by most retirement financial advisers, but as ASIC’s MoneySmart website points out, even a relatively small balance of $150,000 can mean $6,000 per year, or $500 per month. This can enable someone in the transition-to-retirement (TTR) phase to move to working part-time while beginning to draw down a pension.

Of course, it’s worth noting that if you are using a TTR pension you can only withdraw up to a maximum of 10% each year. All other account-based pensions have only a minimum amount you must withdraw each year, and the amount depends on your age. It’s also worth noting that the government has proposed changes to the taxation of TTR strategies from July 2017, so make sure you discuss this with your financial adviser.

Managed funds retirees prefer to invest in

Based on our search statistics, this is how the managed fund preferences of retirees ranked:

  • 24%: Pre-mixed investment option
  • 23%: Australian shares fund option
  • 22%: International shares fund option
  • 14%: Multiple options held
  • 12%: Australian Equities Index fund option

Note: The percentage values (rounded to whole numbers) represent the distribution of usage for the ‘managed funds’ filter

36% (of those who clicked on the ‘fees’ filter) want free unlimited investment switches from their managed fund, so they can change their asset allocations or investment choices as they age.

Securities retirees prefer to invest in

It seems the majority of Australian retirees are fairly patriotic! 61% are looking at Australian listed stocks, while just 39% are looking at international exchanges.

Note: The percentage values (rounded to whole numbers) represent the distribution of usage for the ‘listed securities’ filter

We hate paying fees

Whether it’s parking fees or lawyer’s fees, everyone hates seeing a chunk of their hard-earned cash disappear. When it comes to account-based pensions:

  • 36% are looking for unlimited free investment switches, so they could make sure their investments always match their life stage, risk appetite and account balance.
  • 32% are looking for a $0 termination fee so they could leave the fund easily if it stopped meeting their needs or if a better offer came along.
  • 32% are looking for a $0 fee for making a lump sum withdrawal, so they can withdraw more than just the annual draw-downs from their pension. This means that if they want – and if they can afford it – they’ll be able to withdraw a lump sum to pay for things like an overseas holiday or renovations if health problems moved them into a wheelchair full-time.

Note: The percentage values (rounded to whole numbers) represent the distribution of usage for the ‘fees’ filter

Who would you trust with your nest egg?

A 52% majority of visitors searched for 5-star rated account-based pensions, while 25% included 4-star rated pensions in their search. It all depends on which fund has the right mix of pricing and features to suit both your budget and your investment appetite.

Note: The percentage values (rounded to whole numbers) represent the distribution of usage for the ‘star rating’ filter

In 2016, CANSTAR researched and rated 64 account-based pension products from 58 different providers. Take a look at our comparison tables and you’ll see which accounts have been judged as rewarding you with an outstanding value income stream during retirement.

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