The Grattan Institute report “Money In Retirement – More Than Enough” paints a picture for retirees that seems disconnected from the real world.
If you believe the report, the super system is serving Australian’s so well that its generosity needs to be significantly scaled back? Imagine a world where pre-tax contributions were limited to $11,000 per year and after tax contributions were subject to a $50,000 per year/$250,000 lifetime cap!
With $17.5 billion currently in lost super, it seems a lot of Australian’s are not taking their super very seriously and this is probably because they see it as a gift as they don’t make any additional contributions to super themselves. If they sought advice and made some additional contributions at an appropriate time and in the most effective way, the outcomes could be so much better.
Perhaps there is merit in linking future super concessions like increasing super guarantee from 9.5% to 12% (opposed by the Grattan Institute report) with a mandatory requirement for members to have to make additional super contributions to gain the additional entitlement from their employer? This might improve member engagement with their super and further reduce the reliance on the Age Pension in the future?