Mr Keating has proposed a Commonwealth insurance scheme that would guarantee people income support, aged care and accommodation when they reach the octogenarian stage of life.
Australians are living much longer and the superannuation pool "can never be big enough to sustain you till your 90s," he said.
"We can't try and pretend that like a piece of Indian rubber, we can stretch the accumulation from 65 to 95," he told ABC TV.
At the moment superannuation lump sums will have expired by the time people reach 80, forcing them to survive on the pension.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
He said under the scheme he envisaged the savings of people who die early would subsidise those who last into their 90s.
"It's a classic insurance thing. It's like the houses in the street, you pay your insurance, but only one house burns down," he said.
