80% aged over 60 died without superannuation
Eighty per cent of people aged 60 and over who died between 2014 and 2018 had no superannuation at all in the period up to four years before their death.
That is the startling analysis of Australian Taxation Office (ATO) conveyed to the Government as part of a key consultation around the objective of superannuation and pointing out just how many people are outliving their superannuation balances.
The analysis comes amid arguments about how many people fail to use all their superannuation in retirement and amid the Government’s looming May budget move to reduce tax concessions on balances over $3 million.
The analysis found that around 35% of those aged over 75 have superannuation, 58% for those aged 65-74 (2019-20). And, where death benefits are concerned, the HILDA data shows that 80 per cent of people aged 60 and over who died between 2014 to 2018 had no super at all in the period of up to four years before their death. For those aged 80 and over, 90% had no super in the four-year period before their death.
The analysis has formed part of an Association of Superannuation Funds of Australia submission to a Treasury consultation on the objective of superannuation with the organisation stating: “Delivering income in retirement must remain a priority for the superannuation system (and for the formulation of the objective) but policymakers should be careful not to overstate any current concerns about members under-consuming their savings”.
The ASFA submission makes clear the significant divide between APRA-regulated superannuation funds and self-managed superannuation funds (SMSFs) on the question of the Government forthcoming change to superannuation tax concessions.
ASFA states in its submission that “the recent announcement by the government to introduce 30% tax on super balances above $3m is intended to reinforce the purpose of the super system to provide income in retirement by addressing concerns that superannuation savers may be focusing disproportionately on wealth accumulation and intergenerational transfers”.
“In making this change the Government has argued very high total super balances are better described as having a purpose other than providing income in retirement,” it said.
Elsewhere in its submission, ASFA has urged greater legislative recognition of the role of insurance inside superannuation, suggesting that it be recognised in the Explanatory Memorandum to the bill for defining the objective of superannuation,
“The superannuation system provides insurance that delivers valuable protection to the community and meets members’ needs at reasonable cost. The Explanatory Memorandum to the Bill should recognise alignment of the role of insurance with the objective and clarify the intent of the objective as proposed in the Bill is not to affect the existing role of insurance in superannuation,” the submission said.
SG only became legislated in 1992….
Because their mortgages still were not paid off. Unlike Singapore. It’s all back to front here.
Pump the housing market up with super you reckon? Not sure that’s a good thing.
I venture to say the difference between advised retirees and non advised.
Government didn’t mention this. Doesn’t suit the narrative.
How many of those without super were women??
It’s not going to change, until the financial literacy of Australians improves.
It doesn’t help when most Australians would rather take advice from the generation above, than employ an Adviser.
the old quote, “never take advice from somebody if you wouldn’t step into their shoes”.
Of course super really only came in for most Australians 1992 so your average 80 year old today may have had 10-15 years of low compulsory SG, but a 90 year old today may never have had a single dollar in the first place. And to Sue’s point, many women of the era didn’t work, or once they finished with kids were unable to re-gain substantial work if any, and so would not have achieved much if any SG at the original 3% rate. If you were lucky and in particular well paid government jobs or corporate jobs perhaps you had a better super pool than the average Australian waiting on SG to start, but let’s not go back to the usual criticism of people that they just didn’t work hard enough, didn’t “get advice” etc. They just lived in a particular time without super, or if they accumulated some in those last stages of working life, that was decades ago and surprise surprise may have spent it over the last 15-30 years of retirement supplementing Age Pension.
Spot on Lisa. Anyone starting in the workforce today will be in such a better position than someone who started in the 80’s for example. Whilst these are important stats, they need to put some meat on the bones and look at the set of circumstances surrounding it. It is almost a bit of scare-mongering.
…and I still cannot fathom why the Govt did away with TTR strategies that would have at a minimum incentivised those who “started late” with super to enhance their pension income through enhancing their retirement savings. Probably one of their dumbest moves…
Umm…because they didn’t. They changed how TTR pension investment earnings are taxed.
Correct…and it was the imposition of one of those strategies, namely the 15% pension tax on TTR’s that I was referring to, not the entire thing…the imposition of caps didn’t help either, and changing the 55 year age start progressivly out to 60 was also disappointing.