The majority of Australians are likely to spend their twilight years in near poverty, forced to live on as little $100 a week.
We're living up to 10 years longer than our parent's generation and the sad fact is most Australians haven't accumulated nearly enough super.
Experts say people need $1 million dollars in their super fund to have a comfortable retirement income of $55,000 a year.
Noel Yates, Private Client Advisor at Macquarie Wealth, says most people are shocked when they realise their dire financial predicament.
"The balances in their super are not sufficient when they retire to afford the lifestyle. It's as simple as that. There is a gap between what they need and what they've got," Mr Yates said.
Investment specialist, Russell Medcraft, Managing Director of Financial Choice, says a national survey they conducted reveals half the population doesn't contribute any money out of their own pocket to super - and that HAS to change.
"They totally rely on the 9 per cent contribution the employer puts in or the salary sacrifice amount that they may put in. It's damning the fact that almost half of all Australians don't see that putting extra money into superannuation is worthwhile over the long term," Mr Medcraft said.
"The average Australian with $80,000 tucked away in their piggybank for retirement, this equates to about $100, $120 a week income. There's not a lot, that you can do with that," Mr Medcraft said.
"Pensioners out there, or people two or three years from retirement are really scared, they're really concerned," Mr Medcraft said.More stories from Today Tonight
The tragic reality is that the average amount an Australian man has in super on retirement is just $87,600, a woman $52,000, more than $900,000 short of what we need.
Experts warn one of the the biggest obstacles to Australians' retirement savings is government taxes. Every year 15 per cent tax is levied on our superannuation contributions and interest we've accumulated.
Over 10 years, the average Australian would be $22,150 better off not having to pay the 15 per cent tax on super contributions.
Over 20 years, that figure rises to $80,000 and over 30 years $214,000.
Over 40 years the average Australian would have $506,000 more in super if it wasn't slapped with the 15 per cent tax.
No tax would provide 50 per cent of people's retirement income and reduce the numbers relying on the pension.
Previously, for those who could afford it after paying of the mortgage, $50,000 per year pre-tax could be deposited into super accounts, including the employers compulsory 9 per cent. On June 30, the government halved that cap to $25,000.
"What it's doing obviously is reducing the super that you'll have at the end. The other impact? It's acting as a a disincentive to put more money into superannuation now. A large portion of the Australian population are going to be faced with selling the family home to fund their retirement," Mr Medcraft said.Should the government abolish the 15 per cent tax on superannuation contributions?
Chief Executive Officer,
Financial Choice Pty Ltd
North Ryde NSW 2113
T: 1300 664 118 or 02 9887 1700
F: 02 09870 7556
OUR SOCIAL SITES
Follow us on Facebook | Twitter | Pinterest