Retirement
6 ways COVID-19 is hurting self-funded retirees
Self-funded retirees have been overlooked in government support measures to cope with COVID-19, an advocacy body has flagged.
6 ways COVID-19 is hurting self-funded retirees
Self-funded retirees have been overlooked in government support measures to cope with COVID-19, an advocacy body has flagged.
According to the Association of Independent Retirees (AIR), retirees who have supported their own retirement previously are unable to benefit from the initiatives implemented by the government that support business, workers and social security recipients.
Association president Wayne Strandquist said, “Self-funded retirees who do not receive a pension or part pension or the Commonwealth seniors health card are suffering financial hardship due to the impact of the COVID-19 crisis with little or no support from the government.”
“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.”
Mr Strandquist explained that this has meant that self-funded retirees must bear the full investment risks of their retirement savings in the sharemarket, property and fixed interest instead of having an age pension funded by the government with no risk attached.
He outlined six ways that the COVID-19 pandemic has had a serious financial impact on self-funded retirees:
Dramatic stock market falls
- Market falls have reduced the balances of most superannuation funds by up to 20 per cent, with younger retirees (60-75 years of age) seeing retirement income streams shrinking by up to 10 years.
Drawdown of share investment capital
- Mr Strandquist said this will result in lower returns and potential capital losses.
Lower or no company dividends
- This has already been seen in the banking sector.
Investments in hospitality or tourism companies
- Such investments “are at serious risk of not being recovered”, according to Mr Strandquist.
Reduced rental property income
- As tenants themselves struggle with employment.
RBA cash rate
- The lower bound of the RBA cash rate being reached has resulted in the banks’ 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 Strandquist concluded.
Are you a self-funded retiree that has been affected by any of the above? How are you coping with the current crisis? Let us know in the comments below or contact us confidentially here.
About the author
About the author
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more
Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more
Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more
Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more
Retirement Planning
Age-appropriate housing could reduce hospitalisations for elderly Australians, report finds
A new report from the Australian Institute of Health and Welfare (AIHW) has highlighted the potential benefits of age-friendly housing in reducing hospitalisations among older Australians. Read more
Retirement Planning
Retirement Living Council urges focus on seniors' housing as population ages
The Retirement Living Council (RLC) has called for a renewed focus on retirement villages as a key housing solution to cater for Australia's ageing population, following the release of fresh ...Read more
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more
Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more
Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more
Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more
Retirement Planning
Age-appropriate housing could reduce hospitalisations for elderly Australians, report finds
A new report from the Australian Institute of Health and Welfare (AIHW) has highlighted the potential benefits of age-friendly housing in reducing hospitalisations among older Australians. Read more
Retirement Planning
Retirement Living Council urges focus on seniors' housing as population ages
The Retirement Living Council (RLC) has called for a renewed focus on retirement villages as a key housing solution to cater for Australia's ageing population, following the release of fresh ...Read more