A planned increase in the superannuation guarantee (SG) to 12 per cent will significantly improve retirement savings for those currently aged 25 or under, according to an Australian Institute of Superannuation Trustees (AIST) and Financial Services Council (FSC) report.
The SG is to be increased from 9 per cent to 12 per cent between 1 July 2012 and 1 July 2019.
Under a 12 per cent SG, the report revealed at least 65 per cent of workers currently aged 25 or under would achieve a targeted retirement income level equivalent to 65 per cent of pre-retirement income (deemed a reasonable level for financial adequacy in retirement).
In contrast, under a 9 per cent SG, no under 25 year olds would reach the ‘adequate’ level of retirement savings and only 60 per cent of workers currently aged 20 would achieve that goal.
“This research confirms that 9 per cent super falls well short of providing the average Australian with a comfortable retirement,” AIST chief executive Fiona Reynolds said.
“Australians should be in no doubt that we need to lift the superannuation guarantee to 12 per cent and, arguably, there is a case for further increases.”
Financial Services and Superannuation Minister Bill Shorten said the government was delivering on its commitment to increase the superannuation guarantee to 12 per cent.
“This government is committed to ensuring the golden goal of lifetime income security is accessible to all Australians and the 12 per cent levy will help achieve this,” Shorten said.
