We’ll spend our super our way

Australians aged 50 years and over object to the government having a say in how they spend their super, according to the results of a new survey.

The National Seniors survey of 1,500 people aged 50 years and over also revealed 70% had “little confidence” the rules would change by the time they retire.

National Seniors chief executive, Michael O’Neill, said the results demonstrated the strength of feeling among those aged 50 and over around government interference in their “retirement nest eggs”.

“People who’ve made voluntary super contributions have done so on an established set of rules, foregoing other things such as paying off the mortgage earlier or going on holidays. It’s not fair to then change the rules midway through the game,” Mr O’Neill said.

He added any cuts or new taxes would be seen as political, “a grab at low hanging fruit” to prop up the budget just months before an election.

“The problem is changes within super aren’t occurring within a wider articulated retirement income strategy,” he said.
 

Main findings of the survey:

• 54% of those under age 59 say they have only a “fair” or “poor” understanding of super (other options were “good” and “excellent”)
• 40% expect to have $500,000 plus in super; 29.3% $500,000 or less; 18.4% $200,000 or less; 8.3% $100,000 or less; 4.7% under $50,000
   

Gender divide

• Of those expecting $500,000 plus in super, 53.3% are male and only 24% are female
• Both genders combined, of life events that impact on super balances, illness is the biggest at 37.7%
• But for women, divorce (61.9%) and raising kids (59.2%) has the biggest impact on super balances. Figures for men are: divorce (38.1%), raising kids (40.8%)

Lump sums

• 87% say they are not planning to take out a lump sum and go on the pension
• Only 14.3% take, or intend to take, super as a lump sum
• 37.3% take, or intend to take, super as a combination lump sum and income stream
• 26% take, or intend to take, it as an income stream
• Of those who took it only as a lump sum, 29.3% put it into other investments and 26.3% paid off the mortgage. There is an unspecified “other” (32.7%) that isn’t captured under travel, lifestyle spending, helping out kids, home renovations etc.
   

Government influences

• 70% are either “not confident” or “very unconfident” that the rules will not have changed by the time they reach retirement
• More than half (54%) are opposed to restricting access to lump sums (for the under-59s it’s 63.8%)
• 64% are opposed to raising the preservation age (that figure is much higher amongst those who are not retired)
• Vast majority are opposed to government having a greater say in, or control of, how they spend their super (under 59s= 87.8%; 60-69= 85.2%; 70-79= 81.7%; 80 plus= 80%; total=86%)

Voluntary contributions

• Almost 90% have made voluntary contributions
• Of those who haven’t made voluntary contributions, 43% said they had no money to spare; next highest reason is “invested in other vehicles” at 24.2%