38% of recent retirees struggling financially, survey finds

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Research released by Industry Super Australia has found that almost 40% of recent retirees struggle financially, which the group is using to support calls for a higher Super Guarantee rate.

38% of the survey respondents who had recently retired said they were either living on a very tight budget – with only enough for essentials – or weren’t making ends meet. This represents a “spike”, according to Industry Super Australia, with similar research from 2010 finding that 30% of recent retirees reported similar difficulties.

Over a quarter of those recently retired have had to go back to work, the survey found. But it also found that “retirement was thrust upon almost 45 per cent of workers, meaning the more they can put towards their savings during their working life the better prepared they’ll be when it ends”.

Industry Super Australia says the “only” way to deliver certainty for pre-retirees anxious about their savings was to increase the Super Guarantee rate to 12% by 2025 – which is the currently legislated timetable.

“With almost 40 per cent of retirees struggling to make ends meet Australian workers can not afford any delay to the promised increases in the super guarantee rate,” said Industry Super Australia Chief Executive Bernie Dean.

“Only by lifting the rate will workers be able to have the retirement of their choosing and the best chance to control when they end their working life.”

“With an ageing population and many retirees doing it tough, the only way for the government to defuse this ticking time bomb is to lift the super rate.”

There is a fierce debate ongoing about the appropriate rate of the Superannuation Guarantee, and when it should reach what rate. Some in the Coalition are campaigning for the rate to be paused or frozen – with support from bodies such as the Grattan Institute and ACOSS.

Labor has committed to the currently legislated timetable, which was passed under the Coalition.

The survey involved 734 industry super fund members, aged 47 or older, via an online survey or telephone interview.

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1 comment

  1. Raising the super guarantee to 12% is certainly going to improve the retirement of the more affluent, but it will impose massive cost on taxpayers to subsidize the comfortable retirement of the affluent, while doing little or nothing for battlers. It will increase a massive inequity that is causing great hardship for hundreds of thousands of retirees. The larger superannuation contributions will mean massive tax benefits for those on higher incomes (and thus tax rates), but the flat 15% tax rate means lower income earners get virtually no tax benefits, and only sacrifice more of what they might have received as wages to then suffer further deprivation due to the harsh means tests after retirement.
    The far better solution would be to change the tax concessions on super to 15% below the member’s marginal rate, and levy a negative tax (a contribution to their super) where that results in a negative tax liability. OR increase aged pensions and ease the means test – which would actually benefit those struggling in retirement instead of enriching those who are not. Retirees are being demonised as ‘a burden’, and there are constant rants about the cost of the aged pension, but the reality is that the pension primarily assists those in genuine need. Superannuation tax concessions primarily benefit the well off, and cost taxpayers more than it costs to support the needy aged. No, the SG should NOT be raised to 12% – at least not until this massive inequity in taxation has been remedied. And it would nice if the Labor Party would stop lying to battlers claiming increasing the SG will help them. It won’t. It will merely further boost the war chests of the well to do.

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