You won't have to work until you're 67!!!

I had had the opportunity today to be interviewed on a couple of occasions for radio. There appears to be a standard theme in being asked questions about last night's Federal budget. "How will Generation Y feel about having to work longer and work harder?"

This question is based on a nonsense premise. What was announced last night was that the age for pension eligibility will be raised over the next two decades from 65 to 67. The truth is that you can retire at whatever age you wish (and can afford). For some time demographers have been telling us that the old age pension would become unsustainable at some time in the future.

What the budget measure is designed to do is to ensure that the pension is viable for the future. Bear in mind that when the so-called "retirement age" was set at 65 in the 1910 the average male life expectancy was 55.2 years and female 55.8. Incidentally, the pension was set at 26 pounds per annum, which represented just under one quarter of the "basic" (subsistence) wage.

Superannuation will be the most common retirement savings plan in the medium to long term in Australia, with equivalent schemes in the rest of the Western world.

Harry