Contributions – both employer (concessional) and personal (non-concessional) contributions to super for retirement have dropped in the past quarter, raising more concerns that a retirement savings disaster could be ahead unless we are all proactive and take action to plan for the future. One major concern is new retirees spending savings too early. Friday 7 Dec saw several news articles highlighting the possible disaster and drop in savings, based on a report by the Financial Services Council. A summary follows – (our emphasis added).
Leng Yeow, The Australian Financial Review, page 3 wrote – ASFA is calling for an overhaul of the age pension system to make it tougher for retirees to qualify for the pension in a bid to stave off a retirement savings disaster. ASFA, which represents around 90 per cent of all Australians holding superannuation accounts and more than $870 billion in assets, says the government’s income and asset test limits for the aged pension are too generous. A recent study by CPA Australia found Australia is on the brink of a retirement disaster, with an increasing number of baby boomers resorting to the age pension – having largely spent their superannuation shortly after retirement.
Glenda Korporaal, The Australian, page 23 – Australians are cutting back on voluntary contributions to superannuation in the face of increased economic uncertainty and lower contribution ceilings, according to a report yesterday by the Financial Services Council. The report, by FSC Chief Economist James Bond, shows that Australians contributed $19.5 billion to super in the September quarter, 4.9 per cent lower than the September quarter last year. Employer contributions of $15.8bn were 2.9 per cent lower compared with last year’s September quarter. Mr Bond said the figures represented the first fall in employer contributions since December 2009, reflecting slower growth in employment and a 0.2 per cent fall in wages in the quarter.
Rachael Micallef, Investor Daily – Superannuation payments fell sharply in the September quarter, reversing the recovery experienced in the 12 months to the June quarter this year. Data from the Financial Services Council (FSC) showed total superannuation contributions were $19.5 billion in the September quarter, down $6.3 billion or 32.5 per cent from June. “Although a decline in contributions is expected every September quarter, reflecting large contributions in June before the end of the tax year, the decline in September 2012 is larger than the usual seasonal pattern,” the report said. READ MORE
Karina Barrymore, Herald-Sun, page 95 – Retirement savers have slashed the sums being contributed to superannuation funds as concerns continue about rule changes and global financial uncertainty. The Financial Services Council, a lobby group for retail super funds, said contributions had plunged $900 million during the three months to September compared with the previous quarter. Stacked up against the same period a year ago, contributions in the September quarter were down more than $1 billion. “Australians remain very cautious about putting their savings in superannuation at the moment,” Financial Services Council chief economist James Bond said yesterday.
What action will you take to ensure you stave off a Retirement Savings Disaster? Could Self-Managed super (SMSF) be an option for you? Call for a FREE Q&A strategy session – there is no obligation, or come to a FREE introductory seminar that explains all you need to know about Self-Managed Super – get a Roadmap about SMSF and all the steps required – DIY or get us to help you with NO set-up costs! It’s FREE to find out more – 0407 361 596.