KDM Financial and Estate Planning senior partner Luke Marshall said that while the government has introduced a raft of different measures involving superannuation in recent years, none of the measures has really been aimed at Generation X.
“Firstly, there is the downsizer contribution and work test that has allowed Baby Boomers to invest into their superannuation accounts reducing tax revenue and, with some good planning, increasing older Australian’s access to the Age Pension,” said Mr Marshall.
“This is great news for Baby Boomers, but someone has to pick up the bill and inevitably we are finding it ends up being their children, the Gen Xers.”
Mr Marshall also noted some of the measures introduced for younger Australians, including the First Home Super Saver Scheme.
“This scheme is a great opportunity to help younger Australians enter the housing market. However, this will result in less tax revenue for the government which therefore needs to be drawn from other areas in the budget. We are concerned it will be areas that benefit Gen X,” he said.
Another recent initiative, he said, is the Opt-in Insurance for members under the age of 25, which also requires super funds to cancel any current default insurance policies for members under 25.
“Again, this is a great move for younger members who need help building up their low balances. However, this will likely result in increased premiums for everyone else,” he said.
“Insurance providers need young, healthy members in their premium pool, to offset the cost of insuring older, and presumably less healthy members. This is known as risk pooling and is fundamental to the feasibility of the insurance industry.”
While Generation X may have been left out of the superannuation reforms, Mr Marshall said they could still check the quality of their super fund by using the government’s YourSuper comparison tool.
“It’s important to know what you’re paying and compare your fund with the rest of the market,” he said.
“Bear in mind the site can only compare MySuper products.”
Ummm…unused concessional contribution caps??? Ideally suited to Gen X I would have thought???
Most of Gen X missed out on free uni, many were too young for large child care subsidies. The age where we can access super increases right on the cusp of Gen X and Boomers, meaning we miss out on earlier access. Lobby groups are also part of the problem – the push for super on paid maternity leave doesn’t help Gen X women, and these groups seem to have no ideas other than Gen Y handouts.