Belinda’s and Donna’s stories are incredibly common, highlighting how many Australians are being left behind by our superannuation system. Each woman has experienced significant setbacks in their retirement planning years. Life circumstances – regardless of what prejudicial assumptions may lead you to believe – have too often prevented them from making contributions to their super accounts.
Belinda relieved the care of her husband, John, for 14 years. During this period, she did not contribute to her superannuation. Now, as she approaches retirement age, she has been forgotten. This system wasn’t made for the likes of her. Donna has been raising her concerns over the state of her super savings. She feels that she has not put away the right amount of money for a secure retirement. The challenges experienced by both women shine a light on the failures of Australia’s superannuation system.
Damian, another individual case, withdrew his super in 2020 to pay for dental surgery. For now he’s spent $6,000 on crowns alone and expects to need more money in the near future. His experience illustrates a troubling reality. As a result, many people are forced to access their super savings for urgent short-term needs rather than long-term retirement planning.
As of this year, a Treasury portfolio media release trumpeted the news that at least 80,000 Australians are enjoying super balances in excess of $3 million. This combination represents well under 0.5 percent of the population. At first glance, this statistic should prompt questions about superannuation wealth inequality in Australia. At the moment, superannuation pre-retirement earnings are taxed at a flat 15 percent, which is a boon for Australia’s high income earners. Paul was keen to point out this disparity. What this means, he explained, is that “Someone in the highest income tax bracket receives the largest tax benefit. This is probably just the opposite of what you want if your objective is to assist middle- and lower-income workers.”
The superannuation system mandates that employers contribute a minimum of 11.5 percent of an employee’s earnings into their super account. Under this framework, women still tend to retire with about 25 percent less super than men. We have this data thanks to the Association of Superannuation Funds of Australia (ASFA). This discrepancy isn’t just a random oddity—it’s a huge red flag for Belinda and Donna.
Despite talking about more equitable super systems, Belinda didn’t believe in an equal superannuation system at all. When I was 16 and we were getting sold super, it was nothing like what I’m seeing right now. Her experience speaks to the frustration of many people who are understandably confused by all the noise and misdirection around what they can do.
Donna’s anxiety over her financial future is palpable. One is that I’m beginning to feel pessimistic about super. I’m getting to an age where I’ll need it before too long, and that terrifies me. When she did that,” she continued, she shared. And yet, with retirement fast approaching, she is daunted by the intricacies of the process. I can’t afford to get sick … I’m trapped,” she said.
Neither woman disputes the need to plan for retirement, yet each is left wrestling with regret over what they should have done differently. Donna recalled her younger years: “I think back to my 20s when I was just going out, having fun and not even wondering or worrying what super is.” In disappointment, she looks back on her decision not to act. … Over the last few years, I’m really worried now … I thought you all had missed the boat,” she said.
Belinda’s journey has been filled with challenges. She disclosed that she and her partner had to access their superannuation a few times. They only did it when their fiscal conditions were truly last resort. It had to be raided a few times. We withdrew funds when the times were just incredibly dire and dark,” she continued.
Neither woman is alone in feeling disenchanted with the current system. They share a common goal: to secure a financially stable future without struggling during their golden years. Belinda articulated this sentiment poignantly: “I don’t want to struggle through my old age on this little bit of money the government gives you and … just get by and exist.”
Even with these challenges, both women are working to learn about and figure out the complexities of the superannuation system. Folks like them are often left out of the loop. Paul admitted his struggle: “I am still not getting the information — even though I’m trying.”
As Damian succinctly put it regarding life’s fleeting moments: “I reckon, if you’ve got the money when you’re younger, use it to have fun.” His perspective serves as a reminder that while planning for retirement is crucial, enjoying life along the way is equally important.
