Over the past week we've been told by economists at the Grattan Institute that Australians have plenty of money to retire on and the superannuation system is just fine.

Most Australians would think this is a very strange conclusion to reach when the average superannuation balance today for men is $112,000 and women $68,000 and only 20 per cent of current retirees are fully funded.

The situation is undoubtedly more desperate for the one quarter of women with super balances below $50,000, but even men's retirement savings are not going to last long, especially with the rising cost of living.

It is those inadequate levels of retirement savings that led to the Rudd-Gillard Government promising to raise the compulsory superannuation guarantee from 9 per cent to 12. That was due to take effect in July next year until the Abbott Government put the brakes on, so we won't see super at 12 per cent until 2025. Too late for many.

The increase to 12 per cent is far from radical policy — when super was first introduced under Paul Keating, it was intended to increase to 15 per cent over time.

That plan was skittled under the Howard Government, which left it at 9 per cent.

Seeing a pattern here? Every time we're on the verge of increasing super to a level that would provide Australians the dignity in retirement they deserve, it has been delayed and de-prioritised.

Who has spare thousands to chuck into super?

So how did the Grattan Institute get it so wrong in their report released this week? Their modelling has some deeply flawed and misguided assumptions about our universal superannuation system and, more importantly, about the workers who contribute to it.

For starters, they assumed everyone is in a position to make voluntary contributions on top of those made by their employer.

Ask the average aged care worker whether she has an extra $10,000 to throw into her super fund this year and watch the reaction.

For that matter, ask any Australian whether they have a spare $5,000 lying around when their wages have barely moved in the past decade in real terms. Economists make all sorts of assumptions when developing these papers, but the reality is that only 10 per cent of people in the workforce make top up contributions to their super.

Housing is huge problem

The issue of homeownership and retirement is hard to downplay.

For starters, one in four current retirees are either renting or still paying off a mortgage.

Secondly, the rate of home ownership is dropping sharply. In fact, the Grattan Institute itself released a study last year that showed home ownership had been in decline for three decades.

At the time, they warned of a generation of permanent renters. Perhaps this report was put on the shelf at the Grattan Institute prematurely.

Super is far from guaranteed

They also miss a critical fact about superannuation payments. The truth for people working in Australia today is that superannuation payments are far from guaranteed.

Recent analysis from Industry Super Australia shows that 3 million working people — nearly a quarter of the labour force — are underpaid $5.9 billion in super payments each year. That's an average of $2000 each.

The work of the Grattan Institute also assumes people working in physically demanding jobs can continue to do so until they're 67 years old — that's a big ask for a labourer, or a disability carer who must lift adults with physical limitations as a basic requirement of the job.

Many elderly women are living in poverty, having around half the superannuation that men do. ( Alex Proimos: Flickr )

Women already disadvantaged

In an environment like this, with women facing poverty in retirement, it is misguided, irresponsible and dangerous to suggest we scale back the planned increase to super.

Women retire with 47 per cent less superannuation than men, according to last year's Not So Super For Women report.

"I expect to be poor. I may become functionally homeless," one woman surveyed told the researchers.

Another spoke about living at home with her dog. "My dog is old and I probably won't have her much longer. I would not be able to afford to keep another dog, so it will just be me, a very lonely life."

A third put it bluntly — "I am stuffed if my partner decides to leave me".

Let's lift our ambitions instead

It's time for Australia to be more ambitious.

Our retirement system is the envy of much of the world, but it is far from perfect and it was designed to increase to 12 per cent or more some decades ago.

We must fulfil the original promise of superannuation and ensure it is truly universal and provides for an adequate retirement.

Scott Connolly is the Australian Council of Trade Union's assistant secretary.

Correction: An earlier version of this story said that the Grattan Institute assumed you could sell your home to fund your retirement, but the Grattan model does not take this factor into account.