A new report suggesting Australians already have more than enough to retire on is “dangerous” and sends the wrong message, according to personal finance commentator and author Vanessa Stoykov.
The Grattan Institute’s paper took aim at the planned increase to our super contributions from 9.5 per cent to 12 per cent, hitting out at the financial services industry’s “fear mongering”.
Joining Your Money Live, Stoykov, the CEO of Evolution Media Group said she found the report “enraging.”
“They’re saying for a couple a comfortable lifestyle is less than $60,000 a year roughly. I don’t know where they live,” Stoykov said. “It’s not exactly living the high life.”
The report released Wednesday said that the average worker can expect to retire on an income that’s at least 91 per cent of their working wage.
“This sends a really wrong message to people to say, don’t worry about it, you’ll be fine,” she said. “When in fact, we know that most people aren’t going to be fine in retirement.”
She said next generations will face a very different pension system to the current one.
“So, it is extremely dangerous to tell most people don’t worry, you’re going to be fine.”
The report indicated that as most retirees don’t have as much energy for travel, recreation and eating out, they’d more easily retire on less, a point Stoykov rejected.
Renters face biggest retirement burden
While the report suggests renters are among the most at risk of being under financed during their retirement phase, it also said only 57 per cent of people would own a home at retirement by 2056.
“What about the other 43 per cent?” Stoykov asked.
“Because if you’re paying rent, your less than $60,000 a year is not going to cover too much as far as eating, medical costs and living,” she said.
“What worries me is that this report says, you don’t have to take responsibility, the government will.”
As to whether we should lift super contributions from 9.5 per cent to 12 per cent, she said
“It’s a brilliant idea.”