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NewsPension age to climb to 70, but progress on Super
Pension age to climb to 70, but progress on Super

Pension age to climb to 70, but progress on Super

Tags: Consumer Action
Last updated by Someone on

Most older Australians have worked hard all their lives and paid their taxes but now we’re being warned that the retirement age is (again) set to be lifted to 70. 

Ask anyone over 50 looking for work and they will tell you they want to keep working – if only they can find an appropriate job.

In 2015, then-Age Discrimination Minister Susan Ryan found that more than one in every 4 workers over 50 had been discriminated against because of their age which begs the question, what’s the point of raising the pension age to 70 if over 50’s can’t get a job?

Why is business not giving workers with experience and interest a go? Is it because companies maintain a very narrow view of what makes a quality applicant?

Or are we sabotaging ourselves? Older workers can fall for misconceptions by downplaying their energy and motivation so as to lower expectations.

A survey of over 10,000 people found the whole workplace benefits from a spread of ages. Older workers keep a steady pace during busy and quiet periods.

Meanwhile, there is some good news for those saving to fund their own retirement.

Federal Treasury has asked the Superannuation sector to prepare submissions for a review, known as MyRetirement.

When it comes retirement, most of us draw down on a lump sump payment as a regular income and often have a low standard of living and very lean lives because we fear running out of money, according to the Financial System Inquiry (2014).

So are there other options apart from lump sum payments?

The Actuaries Institute believes there should be more options rather than a “one size fits all” approach.

Andrew Boal, head of the Actuaries Institute’s retirement strategy group says it’s about thinking outside the square.

“People get to 50 and decide to think about retirement. We encourage consumers to get income projection statements so they have some idea of how much money they will have when they retire”

The superannuation industry faces the problem that people get to retirement and take a lump sum but don’t have a longevity projection, that is, no protection if they run out of money.

So how do we mitigate that risk?

From July 1, new laws will free up the Super industry for innovation. One of the proposed new products is a Deferred Lifetime Annuity. Basically, if you survive to 85, it will provide you with an income stream no matter how long you live, guaranteed.

Andrew Boal says people should be able to live a comfortable life in retirement and enjoy life without watching every cent. He says consultation is going on now with preliminary results due in 2018... watch this space

We’d love to hear your stories about your retirement planning. How you will cope if you can’t get the pension until 70? Are you worried about staying employed to this age? Do you feel like you’re on track to save enough for a comfortable self-funded retirement? Leave your comments below.

Any information contained in this article is general in nature and does not take account of your individual circumstances, objectives or needs. 

Originally posted on .

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John
John from QLD commented:

We are living longer because we are healthier than past generations at the same age & capable of working longer. Increasing the pension age to 70 does not mean that all 65 year olds will have to go out & find a job. They simply continue in the job they are in. Already the Government has taken steps to increase the retirement/pension age & it will move to 67 gradually by July 2023. This process will have to occur time & time again because our life expectancy will continue to rise. A majority of children born in Australia this year will live to 100 & the annual pension bill for these people would be enormous if they all retired at 65. 

John
John from QLD commented:

While I do think the benefits that politicians get after leaving office are too generous I do not think they are overpaid while in office. However, I do think that the incomes of some company CEOs & directors, sportspeople, entertainers, TV "stars," etc are obscene. Some will argue that their incomes are decided by the market but I disagree because, at the end of the day, we the consumers are the market & we get little say in the matter. Retirement age has to increase because we are living longer & have to be supported by the pension for longer. No politician would increase the retirement age overnight &, when it happens, it will be phased in over several years. 

Henry
Henry from SA replied to John:

I was agreeing with everything you said, until you got to the retiring age needing to be increased bit. You pointed out that we live longer and therefore need to be supported by the pension for longer. That is very true, but should not be a reason why the retiring age should rise. For 2 reasons, one, because we are still just as tired and jaded at 65 so why not spend the increased life span in recreation time, enjoying the fruits of our labour. Secondly, why should we deny younger people work who have their future in front of them and not have them resenting us for this. Plus there could be a third reason, in that employers want energetic and up to scratch technological people, not slow, worn out passengers, despite their experience, wisdom and reliability. Plus, it shouldn't come down to a shortfall of cash to pay the pension bills, because, if the high rollers were taxed properly and have their incomes significantly limited, there would be plenty to go round. 

MemberSally
MemberSally from QLD commented:

Sally from Queensland, I think it is a disgrace; the pollies get to line their pockets with ridiculous high wages, and all the perks you can imagine and get to retire with huge supers for the rest of their lives and to achieve this outrageous spending it comes from the suffering of us the little people who voted them in run the country not put their snouts in the trough. 70 is a ridiculous age for retirement 60 is more suitable, and the only reason they want you to work longer is so they can keep spending your super for longer. We need to start protesting on the streets; remind them they are working for us .............. retirement should stay as is and stop increasing it. 

Anthony
Anthony from NSW commented:

If the increase to 70 for retirement is a progressive process ie by 2030 70 will be the new pension age, then the Australians who will be in this situation can adjust their Super and savings accordingly . If this change is for 2017 then the Government can take a running leap. I have not planned my retirement around unforeseen knee jerk reactions from a bunch of second rate politicians who have and continue to mismanage the australian economy. 

Phyllis
Phyllis from QLD commented:

No. I have worked in the caring industry for 30 years this October, with NDIS starting it looks as so more work pressure going to be on the cards for all. I have worked with burn out and never fully recovered and thought I could drag myself across the finishing line at 65 years but now looks as so I will have to retrain?? 

Someone
Someone from WA commented:

Where is the the equality for all with the proposed move to 70 yrs for the average Aussi but the Pollies get to keep their age at 60 yrs? That is so unfair and only makes the general public resent politicians even more. Life situations means that a lot of people haven't been (or won't be in the future ) able to build adequate Super . Also from 50 yrs on people can start to have major health issues and are forced to leave work. If they don't have enough super and can't get the pension until 70 what do they live on? The dole? This still means government monies are still being used but forcing people to look for work when unwell (so creating more stress in families and with Centrlink!) as well as being unattractive to employers who want able bodied and healthy staff. I believe the solution would be to encourage as many people as possible to be fully funded retirees which to me means scrapping the limits people can put into super and bringing back the allowable asset limit of $1.3 M to encourage people to have rental properties (thereby gaining regular income) and providing homes for people who can't afford to buy. To assist the Banks also ought to have more attractive home loan rates for prospective Landlords. By lowering the asset test it has forced people to sell just to get the pension so they are using up government funds instead of being self funded. 

Margaret
Margaret from VIC commented:

Why do ordinary Australians have to be faced with such harsh financial constraints when all the politicians can get away with benefits/allowances through their working life and then have access to their overpaid pension long before we can have access to ours? Is this the lucky country for us, or just for the politicians? 

john
john from NSW commented:

why don't we crack down on the Black economy which doesn't pay any tax, the majority not contributing to society in any way? If we did that there would be enough to pay for everything the country needs! 

Someone
Someone from QLD commented:

How much do we have to be squeezed after paying our taxes through years of work? Most people find it hard to manage because of health concerns after age 65. How about giving us the same deals as the pollies get? 

Rhonda
Rhonda from NSW commented:

There are going to be a lot of older Aussies on the street then, as those who have to rent & get laid off due to age will have to sleep in their cars. The Centrelink handouts aren't sufficient to pay rent & eat, let along utilities. Suppose the funeral homes will be doing a brisk trade soon. Shameful for such a great country. 

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