Between July 2000 and July 2016 around 3.5 million Australian citizens and residents will reach a minimum age pension age with, on average, considerable remaining life expectancy. Contemporary policy settings would lead this demographic group to expect to enter and remain within an environment of near universal access to an age or similar pension program. This is mainly because Australian public retirement transfers are non-contributory, means tested, marital status differentiated and indexed to inflation and male wages. They are also available to age qualified residents irrespective of home ownership. These factors mean that discretionary private retirement income is both encouraged and discouraged by tax and means test treatments. Private retirement income above various annually reset thresholds would cause a gradual withdrawal of public transfers, progressively greater income tax and a Medicare levy. Thus saving choices can alter the relative income of pensioners at the cost of working age income and retirement age taxes and transfers. Australian social policy creates various interesting intertemporal income trade offs for individuals between private retirement income provision and pre-retirement saving. This thesis quantifies the trade off for single and married males and females who earn previous or projected average incomes prior to their minimum applicable age pension ages from July 2000 to July 2016. It does this by recreating and projecting the post age 45 saving efforts needed to produce three alternate retirement income profiles for outright homeowners. The first income profile is that of the Age Pension maximiser who retains no retirement savings. The second is the income profile of the theoretic pension maximiser who saves sufficient to utilise the means test free area of income available to pensioners. Third is the income profile for individuals who seek to annuitise their income to create a combined publicly and privately funded income stream that remains above the Age Pension income means test exclusion points for an average remaining life expectancy. Continuation of late 20th century pension maximisation and limited saving into the first half of the 21st century seem an inevitable consequence of present and foreseeable retirement income policies for the selected demographic group. However, this thesis explores a more optimal social policy outcome of significantly greater financial independence from the tax transfer system. This is in an environment where the compulsory superannuation system will produce an insufficient supplement to the Age Pension system for the researched demographic group. Consequently, this thesis explores the capacity for average income earners to produce a comparatively high income during a standard retirement.
| Identifer | oai:union.ndltd.org:ADTP/253770 |
| Creators | Parry, Russell Neale |
| Source Sets | Australiasian Digital Theses Program |
| Detected Language | English |
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