So you want to retire huh? It looks like a massive spanner has been thrown into the works for Australians wishing to use their super to live the rest of their retired days ‘nomading’ around the country or just doing whatever the hell they want with their hard earned money!
Scott Morrison this week has become the first Liberal leader or prime minister in almost three decades to advocate the early release of superannuation at an election campaign.
On Sunday the PM announced first-home buyers would be allowed to withdraw up to $50,000 from their superannuation, or 40% of their retirement saving, if they had saved a mortgage deposit of at least 5%.
So what does this mean for young people wishing to purchase their first home.
The Association of Superannuation Funds of Australia estimates someone needs $535,000 in super by 65 to have a comfortable retirement, based on owning their own home outright and being relatively healthy.
To hit that trajectory, they would need to have $68,000 saved up by age 30, $112,000 by age 35, $164,000 by 40 and $219,000 by 45.
Across all age groups, Australians had average super savings of just $143,979 in June 2019.
Men typically had $162,275 in their retirement fund compared with $128,068 for women, a 21 per cent gap (fun right!)
ASFA deputy chief executive Glen McCrea said the early release of super for first home buyers would diminish retirement savings without making real estate more affordable.
‘The early release of superannuation for housing is not a panacea, is not in line with the objectives of the system and will have long-term consequences for retirement incomes,’ he said.