66% of Australians feel unprepared for retirement: MLC

66% of Australians feel unprepared for retirement, women, young people, research, MLC, NAB, savings gapResearch by MLC indicates that 66% of Australians not yet retired feel unprepared for retirement, with only 15% believing they are well prepared.

MLC, which is owned by NAB, has used the release of a research paper to call on politicians to “redouble” their efforts to set objectives for the superannuation system.

“We applaud the major political parties for their commitment to legislate the objectives of super,” said Paul Carter, NAB’s Executive General Manager, Superannuation and Investment Platforms.

“However, those objectives must be clear, measurable and robust to ensure they target an adequate replacement income in retirement  to mitigate generational inequity and gaps in living standards as well as costly and destabilising interventions into the future,” he said.

“Superannuation has been the subject of political whims for too long.”

“Over the past decade, too often the debate has focused on the year to year tax concessions in a system that has not fully matured. Too many have ignored dramatic and ongoing changes to workforce participation, earnings, increasing health costs that will be borne by individuals and other significant changes affecting salary and wage patterns and indeed ‘wealth’.”

“The end result has been constant tinkering, or significant unanticipated change, which has left Australians feeling uncertain about their retirement.”

According to MLC’s survey of over 2,000 people, women and young people are more likely to feel unprepared for retirement. 79% of people aged 25-29 feel unprepared. 74% of women feel unprepared for retirement, compared to 57% of men.

The research also found that people who used a financial professional were “significantly” more likely to feel either ‘very well’ or ‘fairly well’ prepared for retirement. 35% of those who used a financial adviser felt well prepared, compared to 9% of those who did not use any type of financial professional.

MLC says a retirement savings shortfall is “looming for too many Australians”, with the savings gap projected to be $2.052 trillion excluding the age pension. Including the age pension the gap is projected to be $768 billion.

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2 Replies to “66% of Australians feel unprepared for retirement: MLC”

  1. “However, those objectives must be clear, measurable and robust to ensure they target an adequate replacement income in retirement to mitigate generational inequity and gaps in living standards as well as costly and destabilising interventions into the future,” he said.

    Think about it …. The proposed legislative objective for Super savings should be designed to ‘adequately replacement income in retirement to mitigate generational inequity and gaps in living standards’????

    What a nice, warm and feel good objective????

    So what is the Gold Standard for retirement living???

    Dare I suggest that it is the Old Aged Pension.

    So Super savings will be designed to:

    # Replace the Old Aged Pension Income that comes from the Government purse

    # and such Government income will be replaced by your earnings from ‘your savings’ in Super.

    Indeed, what is wrong with that as such an objective has many positives associated with it.

    However the objective then has the riders, ‘to mitigate generational inequity and gaps in living standards’.

    ‘To mitigate general inequity’???

    So does that objective have in mind that my Super income will give me an income well above the Old Age Pension payments??? I don’t think so.

    Would a higher than the Old Aged Pension Super income then cause a ‘gap in living standards’ between those on the Old Aged Pension and those whose are living off their savings in the form of Superannuation??? I think so.

    The OAP for a couple pays $35,000/yr. Not only is this tax free money but it is also ‘free income’ from the Government. If I draw down 5% from my Super savings how much do I need to save to just draw even with the free OAP payments???? Do the maths.

    I thought that I had adequately planned for my retirement but now I find that every year they change the Super rules to my financial detriment. I can now never get the OAP. Yes, I mean never and my Super balance is about $250,000 so my comments about saving Super and the OAP payments are not relevant to me! But they could be relevant to some others??? I am not speaking for myself OK.

    If you weigh having a higher life style during working years and plan to retire with the maximum OAP income with some Super income some may consider that Super savings above the minimum threshold to be paid the full OAP payment is not worth years of economic denial by ‘saving’ in Super for your retirement’??? I just don’t see that ‘fact’ being debated????

    I predict that this proposed objective will justify limiting Super income to be marginally above the free OAP payments so as to ‘to mitigate generational inequity and gaps in living standards’ to those on the OAP!

    Good luck for your future Super savings plans!

  2. MLC says a retirement savings shortfall is “looming for too many Australians”, with the savings gap projected to be $2.052 trillion excluding the age pension. Including the age pension the gap is projected to be $768 billion.

    These figures are too big for my head to work out but doesn’t that mean that the OAP payments add a significant amount to minimise ‘retirement savings shortfalls’???

    And that ‘we’ (not me) need to save an extra incredible amount in savings just to come up to the benefits of the Government free OAP????

    Does that mean that you can achieve that ‘extra incredible amount’ by (a) saving that incredible amount over your working life or (b) be given that incredible amount free from the Govt at pensionable age?

    Either way you still come up short???

    So to do better than the OAP you need to save a whole lot more than this ‘incredible amount’ that is currently lacking in savings????

    Surely others out there have some comment about this???

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