RETIREES with modest superannuation payouts are spending their cash on caravans, holidays and home renovations before surrendering to the mercy of the age pension. With average payouts of just $24,000 – too little on which to survive long-term retirement – almost two thirds are choosing to enjoy themselves and take a “gap year”.

A survey commissioned by the Industry Super Network of retirees from five leading superannuation funds found 50 per cent of over 55s had emptied their super accounts. About one quarter said they had debts of more than 25 per cent of retirement savings. “What we are seeing is that after working to build this country for 40 years, many couples want to take a well-earned trip while they still have their health, which often becomes a big part of their planning for retirement,” ISN chief executive David Whiteley said.

Find and compareSave nowHome loans, savings accounts and more “Our super system should give people the opportunity to have dignity in retirement and reward themselves with a trip around Australia.” However the research found just one in 10 households with less than $100,000 in retirement savings invested any money in pension products that would provide an ongoing income stream in retirement. “The reality is that compulsory super [deductions] need to increase from 9 per cent to 12 per cent if we are going to deliver the expectations that Australians have of their retirement,” Mr Whiteley said.

Punchbowl couple Dick and Judy Whitehead joined the growing band of “grey nomads” travelling the nation’s roads three years ago. They bought a caravan on retirement and trekked from Tasmania to the Red Centre. “We didn’t think that we could afford travel but we’re glad that we could,” said Mr Whitehead, 69, who had spent 50 years working in the building industry. “I’m luckier than a lot of people who work casual or are self-employed and get bugger all when they retire. “The old age pension is a pretty sad state of affairs.” The couple, who both salary sacrificed in the run-up to retirement and still depend on a part-pension, think increasing super would make a big difference to retirement. “Not everyone is in a position to salary sacrifice like we did – they’re too busy struggling to raise a couple of kids and pay off the house,” Mr Whitehead said. “Increasing super is long overdue. Everything else has moved over the years, all costs have gone up and extra money would make a big difference to people’s retirements.”

Source:www.news.com.au

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