Retirees opting for regular weekly income, over lump sum payments

Retirees are increasingly accessing their superannuation funds through an income stream method in comparison to adopting lump sum payment habits, according to fresh ABS statistics.

In 2013 and 2014, nearly 1.2 million seniors received weekly payments of $502. ABS program manager Bjorn Jarvis, said the results have shown a statistical jump from one in five people aged 65 years and over using a super income stream to one in four in recent years.

When it came to lump sum withdrawal routines of retirees, Jarvis explained that in 2013 and 2014, among those who had taken out money in the previous two years, half amounted to less than $25k.

"Three quarters of people used the lump sum to invest in their home, make other investments, buy or pay off a vehicle, or to pay off outstanding debts. For the other one quarter, the most commonly cited reasons were for holidays, followed by general living and medical expenses," he said.

The ABS data also highlighted that the number of Australians with superannuation and average value of people’s accounts grew significantly in the ten years to 2013 and 2014.

Quick wins to help plump up your nest egg:

  • Embrace the sharing economy. New research has found that baby boomers are cashing in on sharing activities like renting out spare rooms and letting out their cars. According to RateSetter, the demographic taking part in the sharing economy are making around $115 per week!
  • Take advantage of term deposit interest rate hikes. Have you heard the news? Yesterday many major banks increased term deposit rates to over 3% in response to the RBA’s cash rate cut. These movements in the market could make it the right time for you to store your funds in an account.

Let’s look at a hypothetical scenario to break down how you could benefit from a term deposit product. Say you earned extra money thanks to sharing activities over the course of a year. By simply storing $10k into a UBank term deposit  account with zero fees for 6 months on an interest rate of 3.01%, you’ll pocket an easy $151. Use this free tool and try out a calculation of your own!