Retirement
Younger Aussies tipped to be ‘very poor’ in retirement
A former prime minister believes younger Australians are going to be ‘very poor’ in their retirement, having drained their super accounts during the early access to super scheme.
Younger Aussies tipped to be ‘very poor’ in retirement
A former prime minister believes younger Australians are going to be ‘very poor’ in their retirement, having drained their super accounts during the early access to super scheme.
As part of the government’s pandemic support, Australians under financial duress were enabled access to up to $20,000 in their super savings, in two tranches between 20 April 2020 and 31 December 2020.
According to APRA, a total of 3.5 million initial applications were approved across the full period of the scheme, including 1.4 million repeat applications by those financially strained by the pandemic, putting the average payment at $7,638.
However, the architect of Australia’s compulsory superannuation, Paul Keating, has condemned the government for putting the burden of the economic recovery on younger people.
Mr Keating argues that members who accessed the superannuation scheme and withdrew $10,000 to $20,000 from their superannuation could be down hundreds of thousands dollars come retirement.
“The government made young people, broadly, carry the burden of the pandemic themselves before JobKeeper and before JobSeeker, and this means that someone 25 say or 30 who just pulled $25,000 or $30,000 out of their account, have lost half a million 30 years down the track. Half a million, half a million for 30k now,” Mr Keating explained on ABC 7.30.
“I mean how could you do that to young people? So, as these people get into their 50s and 60s, they are going to find they have a very poor superannuation, and they can thank the government for this.”
The former PM pointed out that the same people who accessed their superannuation early will be forced to carry the burden of funding an ageing population.
“This is one of the critical points. When I started this 35 years ago, 6.7 people between 15 and 65 carried the retirement burden of everyone over 65,” Mr Keating said.
“Today, that’s 3.7, and by 2030 it will be three. So, you have got three people by 2030 looking after everyone over 65 where before there were 6.5 people.”
When questioned if the pension system will remain enough of a safety net, especially for older women who statistically have less than their male counterparts, Mr Keating said: “Yeah. Well, I think pension adequacy is a really big point but, again, as the dependency ratio rises, and you have got more people my age relying on three taxpayers only to look after them, can we guarantee that the pension will even remain as generous as it is today? That’s the big question.
“This is why nothing beats self-provision. Nothing beats self-provision,” Mr Keating concluded.
RELATED ARTICLES
About the author
About the author
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
