The Commonwealth Treasury has revealed that Australians are paying $20 billion annually for Superannuation at an average of $726 for each member – that’s three times more than what we’re supposed to pay, according to Treasury Director David Gruen.
Addressing the Committee for the Economic Development of Australia, Mr. Gruen pointed out a recent study by Grattan Institute that slashing fees to half of the lump sum can result to a 20% increase in retirement incomes. He also reveals that Australian fees cost three times more than Britain, calling for significant reduction of fees would benefit the country as a whole. He points out that government initiatives, such as MySuper and Superstream have to be reviewed, as these products are deficient in covering for longevity risks.
Read more about this on the Sydney Morning Herald website.
Have the younger generation lost faith in Superannuation? Cassandra Macolino from William Buck has raised concerns that younger investors would rather put their money elsewhere. She further adds that the investments outside of super are not even enough to retire comfortably.
If super is that important, what’s turning off the younger generation? For one, changes in super have created skepticism among the younger generation. Moving the retiring age for the future is also not helping, as it delays access to their funds. The government has to step in and make the changes necessary to make super appeal to the younger generation. Otherwise, we’re headed to another age pension disaster.
Read more about this on the Wealth Professional website.
Younger Australians are missing out on thousands in future retirement savings, according to the Association of Superannuation Funds of Australia. A recent research shows that almost 50% of Generation Y and around 40% of Generation X have yet to consolidate their superannuation accounts. The sad part is that one out of five of participants are unaware how to do so.
1 out of 5 participants are also unaware on how to process lost or unclaimed superannuation. 60% of the respondents have never heard of SuperSeeker, the Australian Tax Office online service.
Retirement may be a concern for the future, but educating the younger generation of the benefits and processes involved in superannuation will save one a lot of trouble and hassle. These issues should be addressed, before it’s too late.
Read more about this on the Money Management website.