The SMSF Association has welcomed the federal government’s decision to keep the age pension at 67, arguing the three pillar policy of the age pension, compulsory super, and voluntary savings will enable Australians to retire at this time.
Chief executive John Maroney said evidence shows people’s super balances are starting to “kick in”, while reliance on the age pension has dropped quicker than first thought, according to the last Intergenerational Report.
“It’s also often argued that the average super balance is low, but what this forgets is that it’s based on the average balance in a single superannuation fund,” Maroney explained.
“The reality is many people have more than one account or an SMSF, with figures from Challenger Retirement Income Research in October 2016 estimating the average superannuation balance for a couple who have superannuation assets at $330,000.
“When the high degree of home ownership in Australia compared to other OECD countries is also considered then the fiscal arguments for a higher retirement age lose a lot of their validity.”
Maroney added the Australian Bureau of Statistics figures show many people post the global financial crisis are choosing to stay longer in the workforce after gauging their financial situation, while they also enjoy the social connectivity working offers.
He said the government’s decision to reverse the measure announced in the 2014 federal budget to increase it incrementally to reach 70 by 2035 illustrates that super is achieving its goal of supporting people in retirement.
“The three-pillar policy of the age pension, compulsory superannuation and voluntary savings is working as intended, reinforcing the need to have bipartisan political support for a system that is proving to be one of the most successful economic reforms this country has implemented,” Maroney concluded.
