You may well have heard about the Grattan Institute’s Money in retirement – more than enough report, which posits that “the vast majority of retirees today and in future are likely to be financially comfortable.”
Among other things, the report recommends loosening the age pension assets test, scrapping the plan to increase the superannuation guarantee to 12% and reducing superannuation tax breaks. Here’s what the Association of Superannuation Funds of Australia has to say about it.
ASFA chief executive Martin Fahy described the report as being about “two Australias, where the well-heeled high earners have a fully funded retirement and the rest rely on the state.”
He said the report suggests an attempt to “dismantle our world class retirement funding system and replace it with a model that has two thirds of the population relying on the Age Pension.”
Fahy continued, arguing that in a world of increased longevity and rising health and age care costs, Grattan is proposing for “more Australians to rely on the state and for living standards to substantially decline in retirement.”
“In a world where there are broken work patterns,” he continued, “and where women’s balances are 40% less than men, Grattan wants to leave large parts of our society exposed to poverty in retirement.
“That would be a world where only the few can afford health insurance and where retirement is a dreary replay of the 1950s.”
Since advisers are the frontline when it comes to planning for retirement, it’s important to consider how you’re going to respond to some of the suggestions made in this report. Vanessa has some thoughts on how advisers can respond to the findings of the report here.
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