Over the next 40 years over 50% of retirees won’t retirement the way they want
Over the next 40 years more than half Australians set to retire won’t end up with an income for a comfortable retirement.
Industry Super Australia recently commissioned a model and found that on average, nearly two-thirds of single women won’t reach the comfortable retirement standard. This will be the same for half the single men, and 45 per cent of couples. This also accounts for their super, pension and combined savings.
In its submission to the Abbott government’s tax review white paper, Industry Super Australia calls for an overhaul of the government’s retirement policies.
“One of the main causes is poorly targeted tax breaks on superannuation, which are now wildly out of balance between high-income earners and those on medium to lower wages,” Industry Super Australia boss David Whiteley said.
The analysis found that tax breaks for the top one per cent of Australian income earners will more than double their retirement incomes. Middle-income earners will increase their retirement income by a third thanks to tax breaks.
Conversely, the low-income Australians, who do not get a tax break, will suffer a 14 per cent reduction to their superannuation income.
“This gap is clearly inequitable and unsustainable,” Mr Whiteley says.
To reduce the gap, Industry Super Australia believes tax breaks need to be recalibrated. This would involve having the super compulsory guarantee increased to 12 per cent and low-income super contributions reinstated.
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