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The Forum > Article Comments > Understanding the retiring kind > Comments

Understanding the retiring kind : Comments

By Myra Hamilton and Clive Hamilton, published 9/10/2006

As the baby boomers age, compulsory super has made some interesting transformations in the relationship between citizens and government.

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It is only 14 years since the introduction of universal compulsory superannuation. However, for many thousands of public sector workers, Federal and State, compulsory superannuation contributions were mandatory up until the 90s. Fortunately these were complemented by generous employer contributions.
As a genuine baby boomer (b 1946) I stated work as a public servant at age 20. I was able to retire at age 56 on a comfortable pension guaranteed for life with a pro rata pension for my wife after my death if she outlasts me.
Many others, especially management/executives also had superannuation available, if not required, long before it became universal.
Most baby boomers who did not have super until it became compulsory won't have built up a big enough fund to make a significant difference to their retirement. Continuing work after 65 still won't enable them to build up a large nest egg.

It is the generations after the baby boomers which will be most affected. They will not only have to save for their own retirement but also pay taxes to support the retired baby boomers.
Posted by rossco, Monday, 9 October 2006 12:18:07 PM
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The thing about compulsory super that worries me is just how the managers of our superanuation accounts "bet" our money. I just hope they're not putting it into shonky roadway schemes such as tunnels and freeways. With the prospect of ever increasing oil prices due to wars and supply/demand problems, the transport sector is definately NOT the way to go. Dito with aviation. I hope they don't bet the farm on air travel. Within just a few years, you might be fortunate to even see a commercial jetliner in the sky. What about commodities and farm produce? Government policies have erroded much of our farm gate prices by allowing "free trade" to markets competing against those same farmers for our dollar. The mineral boom has been great for the GDP, but what happens when it collapses due to climate change or wars in foreign countries which may well rage for decades? The Government promises us all things great in retirement, but I'm one of the BB's Rossco mentioned that will have minimal money in the pot when I retire in 12 years (provided Howard doesn't move the goal posts). The best thing the Government can do for me is to let me have my money now so that I can make my own choices about what I do with it. Not only will it benifit me by stopping their double dipping tax grab on my money, it might save them having to pay me a pension at all should I decide my money would be better spent on life threatening pastimes such as buying more alcohol or learning to fly a hang glider. At my age, it should be my choice, besides, I've worked hard all my life in some very poorly paid jobs simply to keep bread on the table. Out of that, I dutifully paid my taxes and Medicare levy and I think I've earned the right to a pension in 12 years time.
Posted by Wildcat, Monday, 9 October 2006 2:02:10 PM
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Thank you for the article. We need analysis of the ways in which superannuation changes society. I am a self-funded retiree and I have to confess that in my slack moments I pat myself on the back. In my more rational moments I realise that I just happened to chose occupations that provided superannuation rather than ones that did not. I am glad that things are changing and that more and more people will have their own nest eggs accumulated rather than to have to rely on money churned through tax systems. But whatever the mechanisms of accumulation and payment, what right does anyone have to expect that the Society will provide for them in their old age? I think that democratic societies do provide pensions because the alternatives would be horrible. But a "right" based on the fact that I have worked hard, is emotional rather than rational.
Posted by Fencepost, Monday, 9 October 2006 7:11:10 PM
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Point taken Fencepost, but your comment is also coming from the mouth/mind of one who (presumably) never has to worry about where you find your next dollar. I'm sure, like most others, you have to be very careful about how you spend you super, but maybe if the day comes when you find your "nest egg" has been severely erroded by geo-political tensions, climate change or some other natural disaster, you might sing a different tune. Also, I grew up in an age where it was a given that if you worked hard all your life, you were entitled to the pension. It's only since I re-educated myself 6 years ago that I now find myself in a decent superanuation scheme, but it will still represent only a drop in the ocean in 12 years time. Anyway, my hard work and long hours meant that I was able to raise my two little future tax payers, who are now paying their share of tax, so you better believe someone owes me something!
Posted by Wildcat, Tuesday, 10 October 2006 1:37:36 PM
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