Quote from the budget:
"Pension age increased to 70 by 1 July, 2035"
Does it mean that I cannot take out my super money until I'm 70 ?
If not, what does it really mean?
Thanks.
The age that you will be able to access your super after the retirement age rises hasn't been decided yet. It's a debate that will be had at some stage.
THE federal government is facing a nasty dilemma over whether to lift the preservation age for superannuation in line with its planned move to lift the pension age to 70.
The preservation age is 60 for most people, so a move from 65 to 70 for retirees to access the age pension would leave a worrying 10-year gap between the two that could create a sharp rise in the number of people applying for a disability pension or a Newstart allowance.
On the other side of the dilemma, the government is running the risk of breaking a pre-election promise if it acts to raise the preservation age.
It is currently 55 for people born before July 1, 1950, rising on a sliding scale to 60 for people born after June 30, 1964.
Jordan George, senior policy manager at the Self-Managed Superannuation Professionals? Association of Australia, said it was important to have ?a careful and measured debate?? on the preservation age because workers in their 60s carrying injuries or unable to move to other jobs would ?almost certainly? apply for pension relief.
While in opposition, Tony Abbott and Matthias Cormann said there would be ?no detrimental change to superannuation over the first term of the new parliament? and a rise in the preservation age would certainly be considered as detrimental by anyone whose retirement plans are negatively affected.
The Financial Services Council says in a new submission to the Financial System Inquiry that the preservation age should rise as part of the measures to reduce the burden on the government as the population ages. It also suggests tightening the eligibility for the age pension, opening up the market for longevity insurance products by changing the tax law, and increasing the superannuation guarantee charge to 12 per cent. All three are either probable or already happening.
It is calculated that the retirement savings gap, which is the shortfall in retirement savings versus the national requirement, was $2.32 trillion in June 2011 if people retired at 60 and that would roughly halve to $1.067 trillion if workers of both genders worked another six years and retired at 66.
The Productivity Commission and the Grattan Institute are also in favour of raising the preservation age.
continues............
