Retirement Wealth Decisions in Australia’s Superannuation System: Part 2, Conversion

Abstract

This is the second in a series of three papers examining retirement wealth decisions in Australia's superannuation system. The work seeks to introduce a holistic approach to examining decision making across the key stages of retirement wealth provision, namely: accumulation; conversion; and, decumulation. The central idea considered in this study relates to the conversion of superannuation savings into retirement income. Using a sample of 365 Australians over the age of 45, we consider three areas, under the following sub-headings: attitudes to annuity market features and products (especially the perception of the public pension as an annuity); financial market factors (such as bequest motives and estate planning, and adverse selection and valuations resulting in the need for financial advice); and the influence of demographic characteristics and their respective impacts on conversion decisions.