Some Australians dying with more money than when they retired: research

Researchers have discovered many Australians are dying with more money to their name than the day they retired, due to withdrawing the bare minimum from their superannuation accounts.

Dr Andrew Reeson, a behavioral economist with Australia's Commonwealth Scientific and Industrial Research Organization, said the the trend was becoming more common, and could be attributed to pensioners' reluctance to take risks with their money.

In Australia, employers are required by law to contribute 9.5 percent of their worker's earnings to a superannuation fund of their choice, which workers can access after their retirement.

"The vast majority of people don't spend their superannuation recklessly, and if anything perhaps a little bit the opposite," Reeson, who will conduct further research on the topic, said Tuesday.

"People are very risk averse and spend at a relatively slow rate, which potentially means that many people will die still with significant superannuation balances," he told the Australian Broadcast Corporation.

The study is based on previously unpublished data from the Australian Taxation Office in 2004.

The Australian government mandates that pensioners must claim a certain percentage of their superannuation, which varies based on age, in order to qualify for tax exemption on their superannuation investments.

Reeson said pensioners' lack of superannuation knowledge left many reverting to the government-mandated minimum as a default.

Reeson said he had observed cases where people were actually dying with a larger superannuation balance at the time of death than when they stopped working.

"It's certainly not uncommon to see superannuation accounts where they're actually growing more quickly than people are spending them," Reeson said.

"This is money that people have earned and saved, and one would hope that they can enjoy it, rather than having a situation where they die without actually spending it." Enditem