TheFinancial Planning Association(FPA) today called on the Federal Government to link the age at which consumers can access lump sum superannuation to eligibility for the age pension.
The recommendation aims to steer retirees away from taking their lump sum payments at age 55, running down this form of savings and then relying on the age pension post-65.
The comments were made during the FPA’s presentation to the Senate Select Committee on Superannuation for its inquiry into Planning for Retirement this afternoon.
According to FPA manager policy and government relations Con Hristodoulidis, providing workers aged 55 and over with the opportunity to work part-time and top up their income with extra money by using their super to generate an income stream will promote a progressive transition from work to retirement.
“We want to give people the opportunity to make decisions about their work and lifestyle without having to consider the different income outcomes – whatever they choose, the income levels should be the same,” Hristodoulidis says.
The FPA also recommended the upfront cost of financial planning be made tax deductible, through the introduction of an investment advice related expense section, similar to the treatment of tax-related expenses in Section 25-5 of the Income Tax Assessment Act (1997).
Hristodoulidis says this move ensures more older workers will be able to afford and access licensed financial planning advice to secure their finances for retirement.
Other recommendations made to the committee by the FPA included: linking the amount people access from super to supplement part-time work with the amount of the age pension; allowing workers over 55 to access part of their voluntary contributions to fund retraining and up-skilling if required; and extending the Senior Australian Tax Offset and Commonwealth Senior Health Card to those over 55 working part-time.
