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Time to talk tough

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Maybe I’m getting old, but I’m getting tired of reporting on problems in Australian society and the mealy-mouthed, gutless, uninspired approaches from just about everyone to do anything about it.

This rush of blood was pumped along by my visit to New York over the last Christmas break, and reading a report that found one in two Australians think they will have to rely on the age pension, which is around $330 a week, to ‘bankroll’ their retirement.

My annoyance might be contained if the number was more like one in five or 20 per cent of Aussies were heading for the pension, which is still big, but one in two of us not able to look after ourselves is a worry.

In the dark

Of course, this was a survey conducted by BT Financial Group and so it’s only a person’s perception or guess of what their super will be like when they retire. This survey actually showed that a hell of a lot of us are in the dark about the important aspects of our super.

For starters, not only did most people surveyed admit that they thought they wouldn’t have enough money when they retire, around a third didn’t know their superannuation balance!

I put the exclamation mark in there for special effect as I know it’s excessive. It shouldn’t be an excessive reaction but because most Aussies are indifferent to super there shouldn’t be an exclamation mark after the sentence.

An exclamation mark should be used in a surprise sentence like this one: “Most Aussies know their super balance!” And until we can actually write this without being surprised, we will have a retirement problem in this country. 

More forceful

As I walked around the streets of New York recording my Sky Business program, I was struck by the number of people sleeping in doorways and even on the sidewalk in temperatures below freezing point. Now let me say the Big Apple has cleaned up its act over the years, and it’s a great city to visit, but when people sleep out in a city that snows, it really gets me thinking.

My age is making me less tolerant to public stupidity and poor use of funds. It’s time for governments here and in our own country to be more forceful about people sleeping on streets. If it costs us more to pay for cops to pick these people up and find them safer as well as warmer digs, then we should pay for it.

We shouldn’t tolerate people being too weak to look after themselves, and we should have the guts to make them help themselves. 

Know your super

In Australia, the push to get super to 12 per cent by the Government will happen between now and 2020, but the right level of saving is 15 per cent and governments need to make us find the extra three per cent, even if it has to come through a levy.

The BT survey found younger age groups were pessimistic about self-funding their retirement, with 40 per cent under 40 thinking they'll need the age pension! But most of these people have had nine per cent of their wage going to compulsory employer superannuation payments since they started work.

I reckon many of these people don’t know what’s in their super fund, they don’t know what it is set to give in retirement and they probably don’t know the name of their fund.

Nowadays a lot of us are relying on the pension.

“80 per cent of retired Australians now rely on the age pension in some form, 40 per cent are on the full pension and 40 per cent are on a part pension of some sort," said BT’s head of superannuation Melanie Evans.

If we don’t get serious and start talking tough on super, we will end up with a big budget deficit problem. 

Get smart on super

An ageing population, which is living longer, needs to have a great super system but it needs super members to be professional, instead of the amateurs most of us are today.

Let’s face it, if you asked most Aussies who own a house what the place is worth, they could ballpark it, but when it comes to super I would bet any equivalent question would draw a blank — even from so-called smart, well-paid people.

It’s time for a public awareness campaign about super where it is explained that for most Aussies, your super could be more valuable to you in retirement than your house. This is especially so in country areas where real estate prices don’t keep up with the fast pace of city property. 

Super idea

A positive finding from the survey was 87 per cent of people, from across all age groups, think the superannuation guarantee payments should rise to 12 per cent.

Super has to become a super topic for discussion and it has to be couched in terms of “it’s up to you to make sure you don’t end up poor or on the street”.

We have pussyfooted around for too long and irresponsibility on the part of average Australians and gutless politicians have left too many of us exposed to a crappy life in retirement.

It’s time for all of us to stand up and be counted, which sounds like a super idea.

N.B. All figures correct as at December 2010.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, April 20, 2011

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