According to research commissioned by Industry Super Australia and conducted by Rice Warner, many middle-income Australians will lose more than $100,000 over their retirement period.
Industry Super Australia chief executive David Whiteley said, “the impacts of these changes are very significant for most of the working population”.
“Executed in isolation they will reduce retirement incomes of middle-income earners, not the well-heeled.
“We seriously doubt this was the government’s intention but these are the consequences when such changes are considered in isolation from the superannuation system,” Mr Whiteley said.
According to Rice Warner, for couples due to retire in 10 years with average earnings of $62,000, $112,000 per person will be lost over the retirement period.
For those 20 years from retirement and earning approximately $45,000 – $1,600 per year per person will be lost.
Comparatively, a couple earning $145,000 each will lose $136 per year per person.
“The data makes a strong case for examining the interaction of the age pension with the super system, with consideration of a more efficient, equitable structure to increase self-reliance in retirement for as many people as possible,” Mr Whiteley said.
“If the government wants to significantly scale back the age pension then it must offset the impact by making serious reforms to super to fill the retirement income gap.
“At a minimum, changes need to include fast-tracking the Super Guarantee and restructuring tax concessions at the higher and lower ends of the income scale,” he said.
Within 10 years, around half of all retirees leaving the workforce will be affected by pension changes.
Those affected will double from 1 in 3 today to around 7 in 10 by 2055.
I have as many 70 year old clients with $1m in super as I have 70 year old clients with $100k in super. All have had the same opportunities in life. Some worked harder, studied more, sacrificed then to have now, etc. Yet those with less all cry poor, “super wasn’t around when I was young”. Boo hoo…
Should, coulda, woulda… DIDNT.
Sleep in the bed you made for yourself…
Stephen – Those people should A) lower their lifestyle expectations or B) sell some non income producing assets.
Why should I pay more tax so they can continue their lavish lifestyle.
NO WAY IN HELL should they get my tax dollars while they have assets to utilise. Poorer people and schools, hospitals, police, etc are all far more in need of my tax dollars!
Stephen, As a taxpayer I don’t want to fund the retirement of someone with vast assets in cars, collections or holiday home. They can sell them to finance their own retirement.
The age pension is meant to be a welfare safety net. It’s not a “reward” or “entitlement” for everyone who gets old. If the goverment’s changes are hitting middle Australia hard, then great! Middle Australia shouldn’t be receiving tax payer funded welfare. If there are other areas of middle and upper class welfare that should be scaled back, then lets do that as well.
The government should be congratulated for making a start on rolling back middle class welfare, and encouraged to broaden their efforts. Scott Morrison seems like he may have the backbone to do more of it. Let’s hope he is appointed Treasurer soon.
OK so the assets test limit is $823k instead of $1,155k but the issue is that a pensioner couple with $1,155 k of assets does not necessarily have those assets as Financial or income producing assets. They could have only $400 or whatever in allocated pension but the balance could be cars, collections or quite likely an inherited holiday home which is not rented out but which could now be worth say $500k. As a result they would lose all pension under the new assets test and have just the ABP to draw on which at the min of 5% is not going to go very far – do we now have a new middle class poor ??????