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20 May 2020
The chairman of a Wimmera group representing people in retirement believes government efforts to help society cope with the impact of the COVID-19 pandemic has overlooked self-funded retirees.
Wimmera Australians In Retirement chairman Rick Walker said the group was missing in government measures, which had supported businesses, workers and social security recipients.
Mr Walker said self-funded retirees who do not receive a pension, part pension or the Commonwealth Seniors Health Card were suffering financial hardship due to the impact of virus.
“With the introduction of compulsory superannuation, the intent of the government was to encourage more Australians to fund their own retirement and reduce reliance on the age pension,” he said.
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“This has meant self-funded retirees must bear the full investment risks of their retirement savings in the share market, property and fixed interest instead of having an age pension funded by the government with no risk attached.”
The group’s vice-chair Lyall Wheaton added that the pandemic was having a serious financial impact on self-funded retirees in many ways. He said this was occurring via –
• Dramatic falls in the stock market reducing the balances of most superannuation funds by up to 20 percent with 60 to 75-years retirees having their retirement income streams reduced by up to 10 years.
• A drawdown of share investment capital that would result in lower returns and potential capital losses.
• Lower or no company dividends expected such as already announced by leading share investments including banks.
• Investments made in companies that operated in the hospitality and tourist industries at serious risk of not being recovered.
• Reduced rental-property income because many tenants had been stood down from work.
• Reserve Bank cash rate resulting in the fixed-interest and bank-interest rates being close to nil.
“All of this means that many self-funded retirees with assets above the age pension threshold are now receiving less income than the full-age pension and do not qualify for the Commonwealth Seniors Health Card and the $750 income supplement,” Mr Wheaton said.
The entire May 20, 2020 edition of The Weekly Advertiser is available online. READ IT HERE!