Grattan Institute has renewed calls to scrap the Superannuation Guarantee increase as its updated projections show most Australian workers will only cop - at worst - an 11% fall in their income after retiring.
The think tank updated its retirement income projections to reflect the 2015-16 ATO taxation statistics and an adjustment to how voluntary pre-tax super contributions are captured in the model.
Its new projections conclude that most Australian workers can expect a retirement income of at least 89% of their pre-retirement income even when accounting for inflation.
This is a two percentage point revision to its earlier projections published in November.
"This is well above the 70% benchmark endorsed by the OECD, and more than enough to maintain pre-retirement living standards," Grattan said.
"Many low-income Australians will get a pay rise when they retire, through a combination of the Age Pension and their compulsory superannuation savings."
Grattan thinks the Government should scrap the legislated plan to boost the Superannuation Guarantee from 9.5% to 12% and save $2 billion a year.
Instead, the Government should focus on boosting the maximum rate of Commonwealth rent assistance by 40% which could be worth more than $1400 a year for a single retiree, it said.
"The main beneficiaries from a higher Super Guarantee would be high-income workers who would benefit from further super tax concessions," Grattan said.
"Retirement incomes for low- income workers would increase by around 2.5%, but most low- and middle-income workers would see very little change in their retirement incomes, because lower Age Pension payments would largely erode the increase in income from savings.
"And of course all workers would have lower incomes while working if the Superannuation Guarantee increases."