Broad assessment needed before pension age lifted
A broader assessment of the superannuation and retirement incomes system is needed before the Government moves to lift the pension age to 70, according to Institute of Chartered Accountants (ICAA) superannuation specialist Liz Westover.
Commenting as part of an ICAA discussion of the mooted move to lift the pension age, Westover said that, as a society, Australia needed to ensure it had a retirement system that was sustainable on a long-term basis.
"Perhaps before we jump in and increase access ages, we need to assess what we really want out of the retirement system and manage the expectations of our society in this regard," she said.
"When the aged pension was introduced over 100 years ago, it was meant to be a safety net for those that outlived average life expectancies, were unable to work and had no other means of supporting themselves," Westover said.
"Today, life expectancies far exceed the age at which people are able to access the aged pension, many retirees may well have the capacity to continue working while others will re-structure their affairs and access the aged pension as 'their right'."
She said everyone had a choice on how they how they managed their affairs or when they chose to retire, but as a society it was important to go back to basics on what Australia's aged pension and superannuation systems were actually for.
"Should the aged pension be re-designed to meet its original safety net objective? Eighty per cent of those over the age of 65 are reliant on some form of aged pension.
"We need to question whether this is really what we want out of the system or indeed whether or not this model is even sustainable," Westover said.
Originally published by SMSF Essentials.
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