Australians sacrifice retirement for healthcare
COTA Australia warns that many Australians are withdrawing from their superannuation for essential healthcare, threatening their retirement security.
It has been revealed that many Australians are tapping into their superannuation funds to meet essential healthcare costs, raising concerns about their long-term financial stability in retirement, according to COTA Australia.
According to recent reports, over the past five years, more than 150,000 Australians have accessed their super early through the Australian Taxation Office’s compassionate release of superannuation scheme. This trend highlights a growing reliance on retirement savings to cover medical expenses, including dental care, IVF, and weight management treatments.
Patricia Sparrow, Chief Executive Officer of COTA Australia, voiced her alarm over the situation, emphasising the significant long-term effects of these withdrawals.
“We need to address the fact that people aren’t able to afford things like dental care rather than forcing people to dig into their superannuation and creating another problem down the track,” said Ms Sparrow.
“When you take the compounding impact into consideration, a $20,000 withdrawal at 40 years of age could mean around $100,000 less at retirement. That’s a huge impact that needs to be properly considered,” she explained.
Ms Sparrow lamented the difficult choices facing many Australians, saying: “It’s shocking to think that so many Australians are in a situation where they must choose between accessing essential medical care and sacrificing a dignified retirement.”
She called on the Federal Government to take decisive action, advocating for clear legislation regarding the purpose of superannuation.
“Our superannuation system is designed to ensure Australians can retire with dignity,” she said. “The government has a role to play in ensuring people are completely aware of the impact of accessing their superannuation early.”
Highlighting the plight of those most affected, Ms Sparrow added, “It is undoubtedly our most vulnerable Australians who are being forced to access their superannuation to pay for basic healthcare – the people who need a healthy super balance more than most.”
She urged swift action to address this issue, warning, “If we don’t act quickly, we risk ending up with a generation of people who have worked hard all their life but don’t have the super balances to show for it.”
COTA Australia’s insights illuminate a pressing concern that could have profound implications for many Australians, underscoring the necessity for reforms to safeguard the integrity of the superannuation system.
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