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Without compulsory super reform, young people could face poverty-stricken retirement

With the latest round of hearings at the royal commission looking at the nation’s $2.6 trillion superannuation industry, calls for a complete reformation of the system are gaining in momentum.

There are fears that without a radical super overhaul, youngsters will face poverty when they hit their retirement years. It’s thought this will be not despite compulsory superannuation, but because of it.

With home ownership so hard to come by, some suspect superannuation will not be enough to help those vulnerable to rent and those without an appreciating residential asset to their name during the retirement years.

This has prompted calls for young people to be granted early access to their super balance. The capital could be put towards a deposit on a home, and although their superannuation balance would be worse off, their overall wealth could stand to benefit.

“Super isn’t designed well for young people,” says Simon Cowan from the Centre for Independent Studies.

“If you’re a single income earner, you’ve got a family, you’re just entering the workforce or you’re working high time, maybe superannuation isn’t a high priority for you. You shouldn’t be saving for your retirement, you should be saving for other things.”

“It just makes so much more sense for those people to be able to prioritise their home and home ownership.”

“It’s a real question in my mind whether it’s worth paying the fees, locking this money away, if the end result is you have a $200,00 super balance and no other assets.”

“Those people would probably be better outside the system.”

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