Poverty pummels pensioners in Australia
Australia is one of the most risky places for retirees as more than a third of pensioners live in poverty.
The OECD report Pensions at a Glance 2015 found Australia ranked second last on social equality compared to 33 other countries.
The report concluded that 36% of Australian pensioners are living in a state of poverty. The Australian government spends very little on pension payments in comparison to OECD standards.
Australia spends 3.5% of its gross-domestic product (GDP) on public pensions, whilst OECD countries on average spends 7.9% of GDP to public pensions.
Australians fared a marginally better than South Koreans, 50% of whom live in poverty. This result made South Korea the worst ranking country mentioned in the report for the financial security of older people.
The Global Age Watch Index 2015 ranked Australia the lowest in the region for income security because of the below OECD average pension coverage and the exponentially increasing rate of older people who suffer from poverty conditions.
Combined Pensioners and Superannuants Association senior research adviser, Paul Versteege said base pension rates are very low in Australia.
In March 2014, the maximum single rate of pension with the Pension Supplement and Energy Supplement was $843 a fortnight - equalling $21,570 annually.
Ian Yates, chief executive of Council on the Ageing said, despite well-needed improvements to pensions, increasing pension contributions are very unlikely and the focus should shift to superannuation contributions.
Although $21,570 might seem like a fair amount of money, the basic living cost in Sydney is relatively high compared to other countries.
The Age Pension is payable from the age of 65 for men and women. The pension age will increase by six months every two years from 2017. By 2023, the eligible age to receive a pension will be 67.
The minimum age for withdrawing superannuation benefits is 55 for people born before 1 July, 1960 but increases gradually for people born after this date. The key lesson? Make sure you've carefully planned for your superannuation needs.