If you have children or grandchildren it would be smart to offer them some explicit advice about retirement – don’t expect to rely on the government.

In recent years there have been changes and forecast changes that really should have younger generations focussing on how they’ll be providing for themselves in old age.

Despite what they may say about unfairness in opposition when pandering to voters, both the Labor and Liberal parties have taken to modifying the age pension in recent years when in government.

First Labor bumped up the qualifying age to 67 if you were born after July 1957.

Then the Liberals moved to bump that to 70 for anyone born after July 1958, however this is still subject to last year’s budget passing the Senate.

Now the Liberals have unveiled new pension changes to be coming in this year’s budget. For a couple owning their own home, access to the pension will cut out totally with assessable assets of $823,000. For a single homeowner, access will cut out at $547,000.

Like the age change last year is still subject to being passed by the senate.

The changes made, forecast to be made, and the discussion that continues around reforming the age pension happen for a specific reason – the age pension is the largest single expenditure the Australian government has. And with an aging population there will be fewer taxpayers to fund it in the future.

Many lobby groups and politicians (when in opposition) would gladly tell voters what they want to hear – it’s sustainable, but the recent tinkering by both parties would suggest otherwise. So listening to anyone making comparisons to what other countries do and what they offer is pointless.

The safe thing to do is plan for our own future and expect we’ll be funding it ourselves.

Now only if the young’uns would listen that a dollar saved and invested in their 20’s could be worth $8 in their 50’s; if they hit a historically achievable 7% return per annum.

This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.

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