Australians spending retirement savings during the COVID-19 pandemic | 60 Minutes Australia

as important as everyone knows it is the mere mention of superannuation particularly for younger generations used to lead to glazed eyes and stifled yawns but we all woke up when the financial hits of coronavirus led the government to announce retirement savings of tomorrow could be used to pay the bills of today more than 2 million of us have found salvation in our super cashing in as much as $20,000 each of course the money is desperately needed by many but for others it seems to be an excuse to splurge and as desirable as designer handbags new cars and new boobs it might be right now are they're really worth giving it up a comfortable old age for Cassandra tell me about your neck how long has that been bothering you for probably I'd say the last five or six years it might seem like an odd place to start a story about superannuation going through a couple of pregnancies I've just noticed that gravity is now starting to sort of set him but for 41 year old Cassandra Garcia raiding her retirement savings meant a long-planned trip to the cosmetic surgeon I just didn't want a mum tongue I just was just sick of all these little things it was hard to get dressed if have to tuck and put things away and it's just it's an extra 15 minutes every single day trying to picture and then unpack it all at the end of the day as well so I'm gonna go quite [Music] a busy mom and businesswoman Cassandra runs a small tech company that's been lucky to weather the corona virus storm the downturn meant she qualified for early access to her super and like two and a half million other Australians she jumped right in putting ten thousand dollars towards the removal of the breast implants she got as a teenager and a whole body transformation sorry I'm actually having a series of surgeries so the first one I guess was the most pressing for me was actually having my breast implants actually removed 360 lipo actually on my torso so we're going to actually be like hurrying and doing a 360 on my legs and just a little bit of a little tweak underneath my chin from a total of a hundred and thirty-eight thousand dollars the turmoil of the pandemic could already see in Cassandra's super balanced take a thirty five thousand dollar hit so taking up the government's offer it didn't seem like such a big deal when the government says you know these measures are in place to help purchase or to pay off it you know essential items do you see your surgery is an essential item for me essentially yes sometimes intended um that money certainly helped me be able to sort of achieve some things that I'm making me feel a lot better about myself how you feelin Cass slightly nervous but excited it's nice to be able to actually bet here today on yes and get things going do you know many people who are spending their super like you are not specifically just on surgery but many other I guess items that probably with me classes are not essential so things like maybe designer items clothing clothing makeup makeup from mecha it's fitting this super on clothing and makeup yeah I guess sandbags and handbags and very nice shoes is it a short-term way of thinking yeah maybe possibly I guess it's one of those things we'll just have to wait and see what happens always been sacrosanct [Music] money squirreled away throughout our working lives to pay for a happy financially secure retirement but as the corona virus continues to wreak economic chaos the government has had to think on its feet and in those early days allowing those in need to raid their own retirement savings seemed like a good idea our economic response will allow those Australians who are in financial stress to access more of their own money in superannuation this is the people's money and this is the time they need it most but not everybody has used this scheme quite as our leaders intended [Music] breaking into the property market can be tough the best of times but no more so than right now when the pandemic hit Ben Devaney and Mathilde sizin found themselves stuck inside their tiny apartment with deep cuts to their wages and their dream of buying their first home in tatters what was that like for you when you received your first pay slip after taking that pay cut oh it was like I think I cried from over it kind of worked out what we were putting away each month um towards a new house Ben and Mathilde realized they could get the hunt for a home back on track by making the most of the government's super scheme so they made a strategic decision to pull out at ten thousand dollars each to put towards a home deposit in the hope that ultimately it could save them some money it sounds like you know ten thousand dollars isn't so much but actually long-term it is significant yeah that interest grows quite a bit what we thought that ten thousand dollars towards the house would have the same kind of growth and we're not wasting any money on dead rent essentially are you gambling with your future I don't believe so no no I don't think so we're pretty confident we can pay it back so there's pretty minimal risk for us absolutely we have a spreadsheet ready sounds like you really could [Music] it's an online forum it takes about five minutes to complete you check the eligibility criteria tick a box there's no requirement to provide any evidence or documentation up front and then up to ten thousand dollars arrives in your bank account within five days and suddenly superannuation is sexy thousand dollars in the bank suddenly you've got ten thousand dollars in the bank economist Andrew Charlton is director of consulting firm alpha-beta which has been crunching the numbers on how people are spending their withdrawals he believes the simplicity of the scheme and the lack of checks and balances has simply invited trouble some people no doubt took the money out and make very sensible financial decisions with that money other people took out the money because they were experiencing real hardship but I think there are a group of people who have taken out the money in order to boost their spending in order to purchase some luxuries and other items what were they spending it on two thirds of that money was being spent on things like clothing electronics home wares automotive things that support people's lifestyles but aren't necessarily the necessities like food bills etc even more gobsmacking is that many of those who dipped into their retirement fund don't appear to have needed the money at all our research shows that this policy has not worked entirely as it was designed it was designed to help people through significant periods of hardship and our evidence suggests that nearly half of the people who accessed superannuation early had experienced no drop in their income after accounting for additional government benefits that they receive ultimately it is their money though shouldn't they spend it how they choose no question but maybe at the expense of their well being at the other end of their life in retirement a new wheel exciting yeah I'm absolutely in love with a super cache today this is your money and it's the way you want to spend it it is super headache tomorrow how much could people lose up to 5 to 10 times the amount that they are taking out today but don't worry I don't regret it being happy this is fantastic that's next on 60 minutes cosmetic surgeon dr. Daniel Lanza has seen a bump in his business I'm just marking your jaw line this is Cassandra Garcia is one of many patients he's seen who've cashed in their super to pay for cosmetic surgery just like that did they give you your injection yes it's perhaps the little surprise he sees it as a shrewd investment everything's a balance so they're saying you know what I want to use that money now to feel better about myself now and I'll have less money later on that's their choice really we're superannuation was designed for is it the government made a decision that the Australian people can have their superannuation now not to retire they wanted to have their in supera now so they could spend it now are we going to tell them what to spend it on or not so I think it's a good good decision I'm very proud of the Australian government is there a risk that the early access scheme has turns to renovation into an ATM no there is no risk that superannuation will become an ATM sinister it's been a pretty challenging time isn't it when you think about where we were six months ago you know the economy was in pretty good shape for assistant minister for superannuation Jane Hume extraordinary times have called for extraordinary measures and there's nothing wrong with giving needy Australians the ability to pay their bills even if it costs them at their retirement that is a big deal whether they take money out you know it's a big deal that trade-off do they leave it in superannuation and build that nest egg over time or do they take that money out now but that's their decision they understand that trade-off and for many people the benefit of taking that money out now outweighs the benefit of leaving it in in the future really doesn't yeah it may well for many people the government isn't in the business though of telling people how to spend their own money so should they be using it on things like cosmetic surgery in a way would be disappointed to find out that they were but again this is not necessarily taxpayer money overwhelmingly it is their own savings that they're spending it's not in the spirit of the scheme but if they meet the criteria for early access it's up to them the vast majority of people have used this money as an economic lifeline how did you feel when you lost your job must be pretty awful I hope I was like gobsmacked and that I lost it and then I went into the I don't know how I'm going to survive I don't know how I'm going to pay my bills in April 26 year old Ashley Masterson became one of more than 800,000 australians out of work due to the pandemic she's a perfect example of the government's prime target for the super scheme I was like oh like I can finally do some things that I might not have been able to do so this is an opportunity for me it was a huge opportunity and so how much superannuation did you have ad 27,000 and you took out ten thousands then I guess you've got a lot more of your working life to come but you're potentially now forfeiting tens of thousands of dollars in retirement it's not something that I even think about at the moment because you don't know what's going to happen it's too far in the future way too far in the future actually new wheels how exciting yeah I'm absolutely in love with it so this is more than a third of your nest egg right here it is I don't regret it I don't regret the decision at all I think it was probably the smartest thing I financially done in a very long time Ashley's new car helped her find another job and she used the spare cash to pay bills and finally get some much-needed breathing space while her superannuation has taken a hefty blow she says she'd happily take out another ten thousand if she possibly could being able to live a happy life is a lot more important than retire and go play golf at 70 what would you say to those people who say to you Ashley you shouldn't be taking out any money from your superannuation policy mr. businessman you live on $1,500 a fortnight and tell me if you can survive and still live the lifestyle that you want to live this is your money and this is the way you want to spend it it is according to the super industry's peak body half a million Australians have not just kneecapped their Superfund they've drained their accounts of every last cent economist Andrew Charlton believes it's a disaster in the making if you encourage people to raid their nest egg in order to support them through a hardship period then you're just kicking the can down the road for those people and creating hardship at another point in their lives and this won't be the only period in their lives where they experience hardship so when they have their next hardship the superannuation money isn't even going to be there to support them with that let alone for their retirement how much could people lose how much they lose depends on a few different factors how old they are how low the market is when they sell and the level of returns that they might get it could be up to five to ten times the amount that they are taking out today that they'll lose in superannuation balance at the point of retirement that is a huge loss I mean five to ten times it's a massive amount of money for people at the outset the government had estimated that one and a half million Australians would dip into their super butt with a whopping two and a half million Australians taking it up there are concerns many have exploited the scheme without really needing to the tax office is now cracking down on anyone who's broken the rules issuing fines of up to twelve thousand dollars on those who've made false claims the ATO says it'll step in retrospectively on the scheme is it too late then well itor step in not stepping in retrospectively to review people's expenditure and if they were actually able to access it legitimately we do know that the people that meet the criteria for this scheme I have either had their hours reduced they've seen their revenue reduced if they're a sole trader they're unemployed or there because they've tick box they haven't actually had to prove it on their own John Kipp of world the ATO is going back and making sure that those people have met that going back retrospectively I mean if those checks and balances were in place beforehand it wouldn't have gotten to that point we wanted to make sure that people could access their superannuation in a timely manner and for thousands indeed millions of Australians it's proved a lifeline yes much much better so much better I'm a goodness I can't wait to see what this is going to look like in a week's time for Cassandra Garcia there are no regrets this is fantastic she was entitled to access her super and after careful consideration she did whatever the hit might be in the long term here and now that emergency access to her own hard-earned money has got her where she wants to be and that is hard to argue against I think with all the money that I've just invested and just the recovery process it's nice actually finally flying clothes that actually fit me now have you spotted anything yeah I hate to stop it have you done this in this spirit the government attended do you think I've definitely put the money back in the economy I haven't just left it in my bank account maybe I'm gonna feel better about myself and I'm supporting other businesses as well through this do you worry whether people might judge you for that decision the realities I'm working with my decision but the end of the day this is all of our money and is not money that we're learning from a bank I know it's helped a lot of people do all sorts of things they probably couldn't do before school fees bills some people have done renovations but I guess it's all personal opinion if you're facing financial difficulties especially due to the covert 19 pandemic call the national debt helpline on 1-800 double-oh-seven double-oh-seven or go to money smart gov au hello I'm Sarah Arbor thanks for watching to keep up with the latest from 60 minutes Australia make sure you subscribe to our channel you can also download the 9 now app for full episodes and other exclusive 60 minutes content

Channel: 60 Minutes Australia

Views: 144,138

Rating: 4.556468 out of 5

Keywords: 60 Minutes, 60 Minutes Australia, Liz Hayes, Charles Wooley, Tara Brown, Liam Bartlett, Allison Langdon, Tom Steinfort, Ellen Fanning, Peter Overton, Karl Stefanovic, Ray Martin, Jana Wendt, Jeff McMullen, Tracey Curro, Paul Barry, Sarah Abo, superannuation, retirement savings, retirement funds, new car, cosmetic surgery, retirement in australia, covid 19 pandemic, finance covid, coronavirus, money troubles coronavirus, unemployment

Id: W_hQG_dChnM

Length: 16min 57sec (1017 seconds)

Published: Sun Jul 12 2020

Reddit Comments

[u/Opinel06]

No importa que a los australianos no les resulte..., de seguro como nosotros somos un país más ordenado, con educación financiera y donde los políticos realizan proyectos pensando en datos y no solo en portadas de diarios todo va a resultar bien.

Hay que prepararse para recibir la oleada de inmigrantes suizos que van a llegar buscando una mejor vida, tienemos tiempo todavía, a lo menos hasta que se aprueben todas las reformas que llevan proponiendo hace rato.

[u/ffuentes]

Estái comparando a uno de los países más ricos del mundo con Chile. Por supuesto que hay gente que va a querer gastar su dinero en hueás pero no podís comparar un país donde una persona pobre puede vivir tranquila y ahorrar con el sueldo mínimo que nosotros.

[u/Claveler]

Creo que el caso australiano es un buen ejemplo de lo que podría pasar pronto en Chile.

Australia permitió el retiro de 20k AUD de sus fondos de pensiones (las superannuation, capitalización individual similar a las AFPs chilenas) en dos fases de 10k cada una. Ya se ha concretado la fase 1, con 10k AUD. El resultado: 500k australianos vaciaron totalmente sus fondos de pensiones, 2/3 han gastado lo retirado en apuestas y copete, 40% sin acreditar disminución de ingresos.

Y aún falta la fase 2.

Pero en Chile lo haremos bien, o no? Abro el debate (?).

[u/rolf15]

Hagamos retiro de fondos, pero que se deba de quedar un mínimo de plata en la cuenta para que nadie se quede sin pensión. Sino va a ser un problema a futuro.

Por ejemplo hacer que se cotice hasta una pensión mínima básica. Arriba de eso se puede dejar de cotizar o sacar lo que este por arriba de lo mínimo.

[u/MausMaus1]

Ojalá este video-post estuviera más arriba para que todos lo vean. Esta muy bueno.

[u/Razorlines]

Como era eso que decían las afp ? Que la plata era del que cotizaba o algo asi ?