Retirement income goes beyond superannuation

By Fiona Moore

Superannuation is not the sole answer to the issues surrounding Australia’s retirement incomes policy, according to ING Financial Planning’s technical strategy manager Louise Biti.

“Superannuation has a very narrow focus, which is purely at the end of the life-cycle,” she says.

Rather Biti believes retirement incomes policy should be more well rounded so that people are self-sufficient at all stages of the life cycle.

Speaking in a panel discussion on the topic at this year’s FPA National Convention, Biti will join a range of other speakers to debate the importance of superannuation as a saving’s vehicle for people’s retirement.

Among those entering the debate are the Association of Superannuation Funds of Australia (ASFA) Philippa Smith, the Australian Consumer’s Association’s Catherine Wolthuizen, Investment and Financial Services Association Richard Gilbert and Allen Consulting Group’s Vince Fitzgerald

While Biti acknowledges one of the main benefits of superannuation is its ability to compound interest and magnify earnings over time, she advocates a more holistic approach to retirement income policy.

“People need to be able to live comfortably all through life,” she says. Biti argues one of the main reasons superannuation is not the only answer to Australia’s retirement incomes policy is because of the level of discrimination within superannuation.

She notes that people who are single, unemployed, disabled or with broken work patterns are unable to access superannuation.

Biti also highlights other limitations such as people are unable to gear within superannuation, there is a lack of consumer confidence in superannuation, as well as state planning issues.

“In terms of forced saving for retirement, superannuation is the best way. But people need to save for all other things,” she says, including areas such as health and housing.

The session will also include suggestions of alternative saving strategies.

“Superannuation cannot meet all needs for everything. However retirement and health issues are tied up so closely, so you could see changes made to superannuation to help cover those issues.”

Louise Biti will present more of her views in a panel discussion on Friday at 1.45pm.