Why aged pension & superannuation will soon be even harder to access

by Darren Moffatt on November 25, 2013

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There’s been lots of talk recently about increases to the aged pension age. Understandably, many seniors are upset.

Last week the Productivity Commission, (the government’s independent economic advisory body)  released this report about ageing in Australia. It suggests that due to the rapidly ageing population and the huge pressures this will place on the government finances, that aged pension should not be available until the age of 70.

Perhaps this is OK for white collar professionals, but if your work is physically demanding it’s difficult in many cases to work beyond 65. In addition, there is still a stigma among Australian employers about hiring older works. Age discrimination commissioner Susan Ryan makes the very valid point that this culture will need to change if seniors are required to work longer.

There’s simply no point denying seniors access to the pension & making them work longer if no one will employ them.

And now today, another report has been released by the Grattan Institute that recommends lifting the age people can access their superannuation. Currently retirees can access from 55 years, but under this plan by 2035 seniors would not be able to access their own until the age of 70.

It really is looking like aged pension & superannuation will soon be even harder to access. That’s going to make a LOT of people very angry. Both retirees, and Generation X still working.

I see the superannuation proposal as being especially controversial –  super is our money after all. We’ve saved for it with the expectation that we can access it when we turn 65, at the latest.

It will be a brave government indeed that introduces such a change. And if these ideas get legislated and implemented as government policy, then home equity release and reverse mortgage finance will become even more important. In fact,  reverse mortgages may well become the final frontier of income for senior Australians as they wait to access the aged pension or their own super.

(Do you have this problem now? Email me, we might be able to help.)

Would love to hear your thoughts on this . Please leave a comment.

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