Work into your 70s and then sell your house — or suck out its value through a reverse mortgage — before you can qualify for a modest aged pension.

That's the vision of retirement favoured by economists, bureaucrats, and policy wonks in some leading think tanks who see it as an easy way to lift the budget bottom line and boost the economy.

Some, such as the renowned economist Saul Eslake, have even suggested that retirement age be linked to average life expectancy so that — not to put too fine a point on it — on average we'd only get the aged pension for 10 years before we die.

To keep us in the workforce longer, the economic hard-heads want to increase the age at which we can access superannuation, too.

Unsurprisingly, these policies are not popular — hence the new Prime Minister Scott Morrison's decision to dump a plan, announced by former treasurer Joe Hockey in the 2014 budget, to increase the retirement age to 70 from 2035.

"If you're a tradie or a brickie or a shearer in rural and regional Australia, you don't want some suit in Canberra telling you you've got to work until you're 70," Deputy Prime Minister and National Party leader, Michael McCormack, said.

No doubt.

Instead, people will be allowed to access the aged pension at 67 — an age requirement introduced by the Gillard Labor government, and a two-year delay from the 65 years at which people have traditionally qualified for the aged pension.

For people working in a tough, physically demanding job, 67 certainly isn't young.

Pension budget impact

But don't imagine that the pressure to delay the age at which people can access the aged pension to 70, or older, will go away.

The aged pension accounts for almost 10 per cent of the entire Commonwealth budget and it's growing. Without changes to restrict access to it, proponents argue, the costs of an ageing population will cause a fiscal crisis.

"Raising the pension and superannuation eligibility ages to 70 would yield $12 billion a year for the budget, mostly in the form of increased income tax revenue, while producing a lift in economic activity of up to 2 per cent of GDP," John Daley of the Grattan Institute, a centrist policy think tank, said.

"Given increasing life expectancy, it's not unreasonable that those who are able to, should work a little longer."

But not everyone buys the argument.

"It's a manufactured crisis and the claims are seriously overblown," RMIT University's Mike Rafferty said.

Dr Rafferty characterises the policy as punishing people for living longer.

"Why, in a world of abundance, would you cut back on security in retirement for older citizens? The idea that one of the wealthiest societies in the world can't afford to support people in retirement and has to force people to work longer is abhorrent and wrong," Dr Rafferty said.

Superannuation benefits uneven

Behind this debate are questions about where the balance should fall between collective provision and individual responsibility — and about the design of our retirement savings system.

The aged pension is one pillar of retirement savings.

In the late 1980s and early 1990s, Australia in effect partially privatised the retirement savings system through the introduction of compulsory superannuation.

Employers are required to contribute a percentage of each employees' wages — currently 9.5 per cent — to an individual retirement savings account on the workers' behalf, with the savings invested by super funds in financial assets on the workers' behalf and taxed at concessional rates.

The system has created retirement savings for millions of workers who would otherwise have had little or no income beyond the aged pension in their later years.

But the gains from superannuation have been far from evenly shared.

Although very low wage earners have their super topped up by the government, superannuation by its very nature delivers more retirement savings to those who earn more — and it is taxed at a flat rate, so the tax breaks for superannuation savings also disproportionately benefit higher-income earners.

"It actually rewards people who pay the most tax, who have the highest incomes, and it penalises the people who don't pay much tax, or don't have high income. So, it's inequitable by its very nature," Alex Dunnin from Rainmaker, a superannuation analysis and information service, said.

Big fees

Despite reforms to cap the amount of super people could amass without paying more tax, the system — by design — delivers more income, and more tax benefits, to those who need the least assistance in saving for retirement.

The financial services industry, which collects tens of billions of dollars in fees from super, is the other big beneficiary

That's led to criticism about the fairness, equity, and cost of the retirement savings system.

"Combine the tax concessions and the excessive fees taken out of super and it costs far more than the aged pension," Dr Rafferty said.

Home ownership

Home ownership is sometimes described as the fourth pillar of Australia's retirement incomes system, alongside the pension, super and private savings.

But declining rates of home ownership are weakening that pillar, with a growing share of the population likely to be renting, or carrying substantial mortgage debt, when they reach retirement age.

Precarious work is also posing big challenges for a retirement savings system designed when stable, full-time employment was the norm.

In the gig economy, people classed by the businesses they work for as independent contractors, rather than employees, are being denied superannuation while others are piecing together inadequate retirement savings in low-paid casual jobs.

Meanwhile, wages stagnation is undercutting people's superannuation balances and placing more pressure on the aged pension.

Fairer distribution

Despite these problems, Australia has accumulated a vast pool of retirement savings: $2.6 trillion in superannuation and rising.

The aged pension is hardly a champagne stipend — a little over $1200 a fortnight for a couple in retirement. But imagine what it might be if that giant pool of retirement savings was distributed more evenly?

"We've got to talk about a pool where people pay in according to their abilities and they take out of that pool a basic, decent standard of living," emeritus professor of political economy at the University of Sydney, Dick Bryan, said.

"You'd think a sign of a civilised society is that it would say older people should have the right to a reasonable standard of living and not fear for their material wellbeing in old age."

