SENIORS GROUP CALLS FOR A NATIONAL FINANCIAL AID STRATEGY
THE rocky road to financial security in later life for many Australian seniors is increasingly becoming fraught with dangers.
Trying to negotiate the superannuation investment highway can be as perilous as any journey undertaken throughout one’s entire lifetime.
Around every corner there’s a new, often unforseen trap waiting to snare the unwary investor and the path is littered with tragic cases all along the way.
As the global computer networks become more specialised the dangers increase one-thousand fold and there is no comfort in trying to hide behind our passwords and personal security “firewalls.”
Every day we see and read of an unfortunate retiree who’s fallen victim to the high-flying hedge managers who’ve crossed a bridge too far in their pursuit of quick returns..at the expense of the trusting so-called “mum and dad” investor.
Even the most established and hitherto gilt-edged portfolios have come crashing to earth costing the superannuation industry millions of dollars in nest-egg income.
In a way, millions of seniors preparing or well established in their retirement, are like lambs to the slaughter when it comes to building a rock-solid bastion for their rest-of-life earnings.
Protecting the money that will allow them to have a secure future as they contemplate life without full-time employment is a high-stakes gamble..
And it is not just in the wider scope of the superannuation and investment strategies that can lead the unwary into financial ruin.
Even such smaller-scale transactions involving car and house loans, credit and shop card dealings, and the bewildering array of options and requirements necessary for any financial assistance from Centrelink for example.
Many people are unaware of what health benefits they are eligible for, and the effect their superannuation or broader investment options impact on their suitability for such assistance.
Many of the professional advice options are focussed only on making a profit from the “suckers”.
So what can be done to try to protect older Australians from the landmine-strewn landscape that is the super investment industry.
Taking up the cudgels for the cause is the campaigning head of National Seniors Australia (NSA), Michael O’Neill.
He says that financial education at key decision times in life would help people better provide for themselves when they retire.
And he’s called for a mandatory financial education process to be put in place for seniors negotiating their retirement.
It’s a strategy that is would be welcomed by seniors everywhere and certainly one that is long-overdue.
Not all of us have been employed in the banking or financial industries and we don’t have the skills necessary to safely invest the money we have accumulated throughout our working life.
So the consumer lobby group spokesman for the over 50s has made a ground-breaking submission to the financial services watchdog, The Australian Investments and Securities Commission (ASIC).
The NSA called for a coordinated financial literacy awareness campaign, with a particular focus on older Australians and groups who may be disadvantaged.
Mr O’Neill said: “Whether you are buying or selling a home, choosing a super fund or retiring, a little knowledge can mean the difference between financial security and financially struggling later on in life,.
“A government-funded awareness campaign would also reap long-term benefits for Australia’s economy if people were better able to make informed decisions about various financial products and the levels of risk they face, he said.
National Seniors’ research has shown that slightly more than half of respondents to a survey of its members were poorly informed about the kind of investments most likely to maximise returns and minimise risks over a year.
“While it is difficult to predict market downturns, knowledge is power and Australians could empower themselves if they knew more about how their money is invested,” Mr O’Neill said.
“That means public education and awareness from unbiased professionals is needed – both for those approaching retirement and for younger people still very much in the accumulation phase of their superannuation.”
All Australians should be encouraged and provided with the opportunity to improve their financial literacy at any life stage, he said.
“Research has also shown that the overwhelming majority of consumers do not understand important features of their contracts for home loans, credit cards, store cards and car loans.
“Australian consumers, including older people, can only benefit from this greater awareness,” Mr O’Neill said.
Meanwhile, NSA says that a proposed $2000 a year cap on tax deductions for professional education was a short-sighted slap in the face for older workers.
The move announced in the last budget was also contrary to the federal government’s own strategy for overcoming barriers to employment for older workers.
Mr O’Neill said that if the legislation comes into force on 1 July 2014, it will impose an additional barrier on people maintaining their skills and could hasten the retirement of experienced skilled professionals.
“This is short sighted and ignores the wealth of knowledge and experience gathered over a lifetime,” Mr O’Neill said.
“Investing in one’s own professional development is simply good practice.
“Older Australians are encouraged by ministers and bureaucratic advisers to maintain the currency of their skills but this proposal quite simply devalues that advice and plays right into the kind of attitudes that result in entrenched discrimination against mature aged workers.”
A survey of Barriers to Employment for Mature Age Australians in 2011-2012 showed that an overwhelming majority (85.7%) of respondents believed there was not only a mismatch of skills and experience with industry demands but also there were barriers to retraining and upskilling.
Mr O’Neill said the research by National Seniors Productive Ageing Centre showed that early retirement had a detrimental effect on the Australian economy.
It not only reduced the size of the labour force, but also meant that employers had to forego the skills and knowledge of mature age people, their substantial contributions to productivity, as well as their capacity to mentor younger workers.