Concerns over super safety net

SELF-FUNDED RETIREMENT IS DAUNTING

JUST half of all Australians will be able to self-fund their retirement by 2070, new research says.

Projections by actuaries Rice Warner show the latest generation of workers — just starting out in their chosen profession — only has a 50-50 chance of not having to rely on an age pension.

The alarming outlook is compounded by the fact more than $33bn has been taken out of super funds in the COVID-19 early-release scheme, and anticipated negative fund returns.

There is growing debate whether the federal government should lift compulsory super from its current level of 9.5 per cent.

FIONA Dunn thinks saving enough money in superannuation to become a self-funded retiree “seems like an impossible goal”.

The 25-year-old, who works as a producer at a Sydney music studio, has been in the workforce full time for four years and said juggling rent and other current living expenses meant retirement 40 or 50 years from now was far from the minds of young adults.

Ms Dunn already takes a greater interest in her super than many people aged in their 20s, having consolidated her accounts to save money on fees.

“My super was all over the place in at four different funds – I’m in one fund now,” she said.

She expects the age pension to remain as a financial safety net for decades: “It’s incredibly important for a functioning society, and I think there has to be a pension for those who haven’t had the same opportunities that other Australians get”.

Ms Dunn said superannuation and tax should be topics taught at schools.

“Otherwise you are sending people out in the world to jobs and they don’t know anything about controlling their money,” she said.