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Should the superannuation access age be raised?
journal contributionposted on 2017-10-01, 00:00 authored by Rami HanegbiRami Hanegbi
Australia’s superannuation system is composed of individual retirement accounts made of compulsory and voluntary contributions as well as their investment returns. A feature of the superannuation system is that funds can generally only be withdrawn once a taxpayer has reached their preservation age, currently legislated to increase to 60. However, there have been various calls to raise the superannuation access age beyond 60. This could be accomplished by further raising the preservation age or by utilising punitive tax rates on superannuation withdrawals made by those below a set age. Proponents of raising the superannuation access age claim that such an increase would lead to economic benefits due to it increasing mature workforce participation. However, this article argues that such benefits are likely to be limited in nature, and more importantly, will lead to widespread disadvantages, including a marked reduction in the proportion of people’s lives where they are simultaneously both in retirement and in good health. The article concludes by arguing that unless there is a dramatic change of present or anticipated circumstances, raising the superannuation access age would in net terms be a negative policy move.