Talkback: Should superannuation be spent or saved for a rainy day?

The Treasury has released a report that says too many of us don't understand superannuation, and try to save it rather than spend it. Some Australians are even accidentally failing to claim their super. What do you think?

A new Treasury paper says we all need to make a mindshift about superannuation and start spending more of it.

Perhaps even more scarily, some people are letting their super go missing - there is $16 billion in lost super held by super funds or the Australian Tax Office, with Super Consumers Australia saying First Nations Peoples are more than twice as likely to have lost and unclaimed super compared to the national average.

Contrary to government recommendations, a significant portion of retirees, especially those under 65, only take the legislated minimum drawdowns from their super accounts rather than enjoying the chance for more money.

The paper says nearly one-in-five retirees mistakenly believe the government actually recommends this, highlighting a gap in financial knowledge.

A survey conducted by Super Consumer Australia reveals that 61% of retirees drawing down their super opted for the minimum legislated rate in the last financial year. While 56% express confidence in the adequacy of this minimum, a troubling proportion remains misinformed about its source.

The government has set minimum drawdown rates for the retirement phase of superannuation, which starts at 4% for under 65s and grows as you get older. Most people don’t draw more than the legislated requirement, perhaps out of fear of outliving their nest egg.

The Treasury paper goes on to say a female retiree at age 65 has a 45% chance of living to 90, and a male retiree has 33% chance, which means more retirees need to rely on retirement incomes that are sustainable into their late 80s and 90s.

The government seems to want people to have more certainty about how much they can afford to draw down – and they want super funds to provide this by pushing them to offer a new type of product which offers a guaranteed income for the rest of your life rather than the traditional account-based pension.

But what do you think about super?

Should we aim to preserve our super in case we live for a long time or do we need more flexible financial products that give us more certainty about 'never running out'?