Politicians must consider real benefits of higher SG
As the prospect of a higher superannuation guarantee (SG) hangs in the balance, Australia’s biggest super fund has released research highlighting the improvement a higher SG would make to retirees’ bottom lines.
Increasing the superannuation guarantee (SG) to 12 per cent will add almost two years of comfortable living to the retirements of average Australians, according to research commissioned by AustralianSuper and undertaken by Rice Warner Actuaries.
An average Australian currently has a retirement readiness figure of 60 per cent, meaning the retiree would have 60 per cent of the income required to live a 'comfortable' lifestyle for the length of their retirement, with the rest of the retirement funded by the pension, the research found.
The AustralianSuper Retirement Readiness Index looks at a person’s current income, savings and super situation and projects it forward to their retirement, then incorporating the age pension to predict what sort of lifestyle workers will be able to fund. If the SG increase is implemented, the average Australian’s retirement readiness index, if retiring at 65 years, would increase to nearly 66 per cent, adding an extra 1.7 years of 'comfortable' living, while the retirement readiness of the 20 to 30-year age group would increase from 68 per cent to 92 per cent, the figures showed.
By increasing the SG and delaying retirement until 67, the average Australian would be 78 per cent retirement ready.
AustralianSuper chief executive Ian Silk called on all politicians, particularly the independents at the centre of the country’s leadership debate, to urgently consider the adequacy of current superannuation arrangements and support an increase in the SG.
“Ensuring an adequate financial future for ordinary Australians should be a priority for whoever forms the new government,” Silk said.
“The Retirement Readiness Index report clearly shows that all politicians have a responsibility to focus on legislative change to ensure the financial futures of ordinary Australians,” he said.
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