Superannuation system failings exposed
By Craig Phillips
TheAustralian superannuation system is creating two distinct groups of retirees — the haves and the have nots — according to a report released last week by the National Centre of Social and Economic Modelling (NATSEM).
The study, which examined the savings and debt of people aged 50 to 69, reveals 60 per cent of people aged 50 to 54 who retired last year had less than $10,000 in superannuation, while at the other end of the spectrum, 20 per cent of the same group retired with over $100,000 in superannuation assets.
The AMP-sponsored report also revealed many Australian retirees are being forced to live a life of frugality, with 70 per cent of those surveyed surviving on a weekly income of less than $320 or $16,000 a year.
AMP Financial Services managing director Craig Dunn says the report underlined the importance of the retirement savings debate currently underway in Australia.
“Retirement incomes deserve attention because many Australians still aren’t seeing the benefits of our system,” Dunn says.
The NATSEM study also reveals many Australians are approaching retirement with higher debt levels than previous generations — with many retirees using their lump sum superannuation payouts to reduce debt, such as their home mortgages.
“While retiring debt is usually a very good financial planning strategy, it is perplexing that more people in this age group aren’t actively managing down their debt levels before they reach retirement,” Dunn says.
The situation, according to NATSEM, is creating “two worlds of retirement” — one for those who can comfortably support their lifestyles and another for those who have not been able to save enough.
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