The End Of " Retirement " !

Access to superannuation is only supposed  to be allowed in special circumstances, and yet thousands of Australians are withdrawing money from their superannuation fund because of hardship caused by this coronavirus pandemic putting them out of work.  It has been revealed that there is absolutely no eligibility check on why three million people have withdrawn $28 billion from their retirement accounts.

In some cases the need is genuine and the money will be used to put bread on the family dinner table but financial analysis is now delivering other interesting stories..  One senior banker who was not authorised to speak publicly hinted that there has been a ten percent increase in the customers who are up to $25,000 ahead on their mortgages.   The banker said early superannuation access was a factor contributing to that trend.

Another mortgage executive recounted an increase in customers attempting to use the money withdrawn from superannuation as the deposit for a house purchase. Changes to stamp duty laws intended to increase activity in the labour  intensive building industry are making home purchase more attractive to first home buyers.

The purpose of " superannuation for all " legislation, when it was introduced was to ensure that all Australians retired with sufficient income to free them from depending on the old age pension.  There was concern that this aged pension might otherwise retreat beyond the ability of the government to finance it unless the numbers were substantially reduced.

What is causing concern is the reality that some superannuation accounts are now empty.  The entire contents have been withdrawn because of this perceived emergency and the people concerned at are at an age when accumulating a new sufficient retirement total looks unlikely.  Part of the Australian workforce now seems likely to have to work into old age and make do on the old age pension when they finally retire.

To make matters worse, we are encountering the phenomenon of " Stagflation ", which reduces the cost of living and cements in place the stagnation of wage levels which were overdue for an increase.  All this is artificial.   The lockdown stopped people taking holidays and spending money, and this immobility of cars decreased petrol usage, resulting in an oil glut and a sharp price fall.  There is no indication when this coronavirus will end or what sort of economy will then emerge.

Analysis of credit bureau records is also illustrating.   There has been a jump in spending on what the analysts term non-essentials and this includes, gambling, liquor and furniture.   That does contrast sharply with the " hardship " eligibility which is supposed to underscore superannuation withdrawals.

What is done - is done.  And we have to live with it.  But for many the hope of a comfortable retirement is now an illusion.  Sacrificed on the altar of surviving the coronavirus pandemic  !