Retirees hit hard by subprime crisis

THE GLOBAL financial crisis is making its mark in Australia. Speculation in global markets by superannuation fund managers has hurt the retirement savings of many ordinary Australians

The Australian Stock Exchange (ASX) is facing its worst annual performance for 26 years. It has declined so far this financial year by 14.08 per cent and is heading toward 15 per cent. To get a worse result, you have to go back to the 32 per cent decline in 1981-2.

This is starting to hurt ordinary people. Many retirees have had their super accounts slashed because of idle speculation by fund managers in the US housing market. Reports in June show that many prospective retirees who took advantage of last year’s tax changes (allowing them to put money tax-free into super accounts) have lost money. Many even took out loans to take advantage of the new laws.

For example, a retiree aged 65 with a super balance of $500,000 (giving an annual post-retirement income of just $35,731) has lost an average of 12 per cent from the value of their savings. That’s $60,000, or about 18 months of income. Overall, the financial crisis has wiped 5 per cent off the asset value of super funds, or $50 billion.


Solidarity meetings

Latest articles

Read more

Who will pay for the crisis this time?

A global pandemic has exposed just how fragile the world economy already was. Tomáš Tengely-Evans examines why capitalism constantly creates economic crises

Tax avoidance: the rich get off scot free

The United Voice commissioned Tax Justice Network report into tax avoidance by big business in Australia, Who pays for our Common Wealth? has shone a light into very dark corners.

Can’t pay, won’t pay: debating solutions to Europe’s debt

Crisis in the Eurozone Edited by Costas Lapvitsas Verso Books $29.95The debt crisis in the eurozone has become the most glaring problem facing global capitalism.Across the world...