HILDA Survey 2016: Senior’s Superannuation Shortfall?

08 September 2016

The recent statistical report of the Household, Income, and Labour Dynamics in Australia (HILDA) Survey provides a detailed report of income, wealth, and assets of different age groups in Australia and how they are positioned for retirement. HILDA is conducted by the Melbourne Institute of Applied Economic and Social Research and is done every year.

Although HILDA also publishes an extensive report on household income and wealth, today we’ll examine specifically the superannuation wealth among Australians. Superannuation is now usually the most significant asset in household wealth portfolios outside of the family home. The ‘superannuation balance’ of households is a key determinant of whether a person will have a comfortable retirement or not.

According to the HILDA report, there is a strong relationship between age and superannuation balance. Unsurprisingly, this peaks in age groups approaching retirement. Women, on the other hand, tend to have lower superannuation balances than men. This reflects the fact that women (unfairly) still have lower earnings than men, more often work part-time and experience disruption to earnings from child birth.

Men dominate the top 10% of the superannuation distribution and since the Superannuation Guarantee is relatively new (started only in 1993), more than 69% of the superannuation group belongs to the youngest age groups, 50-54 and 55-59. Only 9.7% were in the 65-69 age group.

Most of the wealth of older age group is locked in family homes, investment property, and holiday homes. However, as per the chart below there has been a significant recent decline in home ownership for the 55-64 age group. In twelve years it’s fallen from a high 75.1% in 2002, to just 72.9% in 2014. (This is a worrying trend with deep implications for our society, which I will explore in detail in a separate post soon)

Home ownership rates by age group (Source: HILDA report 2016)

Home ownership rates by age group (Source: HILDA report 2016)


In conclusion, the HILDA Report confirms again what we already know to be true: a large cohort of retired seniors and those approaching retirement will experience a retirement savings shortfall, most evident in the asset class of superannuation. However, the high levels of home ownership provide an opportunity for those affected to remedy this. Financial products such as Reverse Mortgages which provide an easy mechanism for releasing home equity, will play an increasingly central retirement funding role in the years ahead.

If you are a homeowner who is becoming personally impacted by the superannuation shortfall, the good news is you don’t need to sell your home to fund a comfortable retirement. Reverse Mortgage will allow you to access the equity, and to stay in your home.

To learn more about your options, don’t hesitate to contact Heartland Seniors Finance at 1300 889 338.


Information provided is accurate as at 08 September 2016 and may change from time to time