Super-duper holidays are a myth, report finds 24



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The Productivity Commission has found that an enduring urban legend is in fact just a myth. In a report into retirement policy, which was released on Tuesday, the commission was tasked to explore the impacts of raising the age at which people can access their super.

Along the way, they checked in on the story of the retirees who blow all their superannuation on an no-holds-barred overseas trip, or epic around-Australia adventure in order to qualify for the pension.

The commission found almost zero evidence that some retirees and their advisors were aggressively restructuring their affairs to tap into pensions.

While it’s true some 30 per cent of Aussie over-60s were withdrawing lump sums from super, it was most likely use to pay off debt or purchase something that would last through retirement.

Productivity Commissioner Karen Chester told The Australian Financial Review, “Some commentators have suggested that super lump sums have been problematic, but when you look at the data more than 70 per cent have been taken as an income stream”.

“Most folks are actually quite prudent,” she added. “There is little or no evidence of squander and that which is spent is spent on things to help retirees in retirement”.

The Superannuation Policy for Post-Retirement report also found that if most people delayed retiring for just two years, they would do so with at least 10 per cent more in their super fund.

It also found that raising the preservation age to 65 would put $7 billion back into the budget.

One surprising finding was that more than half of men and a third of women between ages 60 and 64 were pushed into retirement whether they were ready or not. This was due to ill health, the loss of a job, or the ill-health of a spouse.

The report steers clear of any political debate about current concessions but does criticise the lack of policy direction from the federal government on superannuation, saying it is hard to know how to design good policy when there is an “absence of clear and prioritised objectives” coming from Canberra.

Are you offended anyone even thought you would blow your super on a big holiday in order to get the pension? Have you heard of anyone doing this?

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  1. Many people don’t have any super and from what I have read in here Grey Nomads save money by travelling around the country. It is a far cheaper way to live. I suppose there will always be the wealthy few who spend money with abandon but on the whole, people are careful about their money and worry what will happen in the future

  2. I have not heard of anyone squandering super. Personally, I like the idea of being independent of government pensions. Fortunately I have enough funds to live reasonably, not at all an over the top lifestyle. The pension should be there for those who honestly need it. I retired at 59 and am enjoying every moment.

    1 REPLY
    • Joan Johansen
      Thankyou for this post.
      To hear a self funded retiree not abusing or accusing aged pensioners of being bludger and a burden on the tax payer is so nice. There are so many who look at pensioners as having been too stupid to not have bothered to save for their retirement. Without looking at the individual circumstances.
      I hope you are able to maintain your independence but don’t ever hesitate to apply for the pension if the need arises.
      We need more people like you who are considerate and thoughtful of others.

  3. I am not sure about this I remember pre retirement advisors talking of investment options that would allow retirees access to a small pension and more importantly cheaper health care that goes with it. Talking to others I’ve found the main purchases with the lump sum are a new car, a family reunion holiday overseas, overdue household maintenance or improvement, then invest for the long term.

    2 REPLY
    • A more accurate figure on the overseas holiday claim would be for the govt to release the number of retirees who actually have a passport. We don’t. Most of our friends and rellies don’t either.

    • Yes and for many who do take overseas holidays it is a family reunion after years of working far from family and friends. Many hardworking Italians, Greeks, Irish and British migrated to Australia and can’t afford to go back until they retire, it isn’t a frivolous, wasteful holiday but a long over due chance to catch up with family and often a last chance to see elderly relatives.

  4. we were forced to retire, hubby lost his job 6 yrs out from 65 yrs, threw our plans out and our live went for a spin as well. I wasnt working due to illness and hubby had a job with long days and hours. We are currently living on our Super, but that wont last long now, and will have to soon apply for part pension to enable us the health care that goes with it…we are running out of money. We had planned a cheap trip around Aust. befor we were too old to go. But that wont happen now. Those last 6 years would have allowed us many other things too, like a new car we desperatly need. that wont happen either. Bosses need to wake up when they fire people of age, they are responsible for aged unemployment.

    2 REPLY
    • Yes. If we had been able to work to 65 those last few years when we were putting as much as we could into super would have put us out of range of a part pension. You’re right. Being unemployed 3 years too soon means we’re more dependent on the taxpayer than we would have been had we had 3 more years saving and of paying to the tax man – not taking from.

    • ahould be unlawfull to dismiss with out any consequence, people short of retirement. Governments should wake up.

  5. Fools, I do not know anyone who is anything but thrifty with the use of their superannuation !

  6. Superannuation didn’t cause the GFC where we watched our super go into free fall and I don’t know anyone who has gone on a spending spree with their super who are they talking to not the average person who invested in super

  7. I had a choice when j retired to take lump sum or fortnightly pension , opted for the fortnightly , carnt access lump sum now, made my choice , so not sure what this is in about but I’m very thrifty , have to be !!

  8. “One surprising finding was that more than half of men and a third of women between ages 60 and 64 were pushed into retirement whether they were ready or not.” I’m glad I read this. I don’t feel so “hard done by” when so many are being treated like we were.

  9. On a Govt Pension due to fact accountant ex husband took off with all of OUR money I find it extremely hard living on a pension. No holidays for me, I struggle paying bills and house maintenance is almost non existent. If only!

  10. The Pollies are the ones wallowing in perks and lurks so they think everybody else is doing WRONG

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