Imagine being able to take early retirement with an income of $65,000 per annum? Sound achievable? For the 70 per cent of Australians who are likely to rely on either a full or part Age Pension to help fund their retirement, then the answer would be a resounding no. But for the lucky few, this is how retirement is and is how the Government hopes it will be for future generations.
In today’s Fairfax newspapers there is the tale of Mr and Mrs Smug, otherwise known as Ron and Sue Hogg, who, through careful planning, a good salary, watching what they spend and not having the expense of children, have managed to surpass the Association of Superannuation Funds of Australia (ASFA) Retirement Standard of the $55,249 required to enjoy a comfortable lifestyle. Of course, this is not a dig at the Hoggs, well done them for being able to achieve that of which the average Australian can only dream. However, for the Government to have this hope that it can be a reality for most, then this is surely just ridiculous?
With the rising cost of living including increased fuel costs, higher mortgage and rent payments and supermarket check out bills going through the roof, finding the extra money to pay into super is near impossible. And for those struggling to survive on the current full single Age Pension of $19,643, a whopping $2287 less than the ASFA recommendation of $21,930 for a modest lifestyle, this must feel as though they have been kicked in the teeth after decades of hard work.
Of course we should be thankful that the Government is planning to increase the superannuation guarantee from 9 per cent to 12 per cent over the next seven years. But while this will serve to increase the amount in superannuation for future generations, it will also make qualifying for the Age Pension unlikely, and will do little for those already struggling financially in retirement.
Is the increased superannuation guarantee simply a case of giving with one hand but taking with the other? Should we say well done to those who manage to achieve a decent retirement nest egg or is this something to which we should all be entitled?