The conclusions drawn by the Grattan Institute in its recently released report How Households Save for Retirement are flawed.

The report is based on the Grattan Institute's analysis of four retirement income pillars.

And several of these retirement pillars do not reflect the real world of how people save for their retirement

The Grattan Institute has included the value of a person's home, their house contents and their vehicles in their retirement income pillars.

There are not many people who can say their house, their house contents or their vehicles are going to give them an income when they retire. So in the real world, I do not see how you can count the value of these as part of someone's retirement income pillars.

The Grattan Institute also includes in a person's wealth, a theoretical calculation for the net present value of any future pension they may get, which the government of the day may not even be able to afford to pay.

So once you remove these so called retirement income pillars, superannuation becomes a significant part of what is left.

So to make a policy decisions based on the view that superannuation is currently the least important part of Australia's retirement income system, is fraught with danger.

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