Superannuation — Who Was It Really For?

As time went by in my life, I never really gave much thought to retirement. When you're working and running a business, retirement seems a long way into the future. It wasn't something I spent much time thinking about.

I do remember, though, when compulsory superannuation was introduced in Australia.

The idea was that every employee would have a superannuation account, with the employer required to pay a percentage of the employee's wages into it. When it first began, the rate was relatively small, but over the years that percentage kept increasing until it eventually reached 12%.

I have always had mixed feelings about the way the system was introduced.

Don't get me wrong — I have no objection to people having superannuation. Quite the opposite. I believe people should have something put aside for their retirement.

What I have never really understood is why the entire responsibility was placed on the employer.

As a business owner, I was effectively being told by the Government that I had to take money from the profits of my business and pay it into my employees' superannuation accounts.

The only way I could do that was to increase my prices to cover the additional cost.

But then the percentage kept rising.

As the compulsory contribution increased, so did the cost to my business. And at the end of the day, there was less left from the business to pay myself and to put towards my own retirement.

This is the part I have always found difficult to accept.

Why should the employer carry the whole responsibility for an employee's retirement?

Surely, there is a fairer way.

My feeling has always been that the employee should have some responsibility for their own future as well. Perhaps the employee could contribute at least 50%, with the employer contributing the other 50%.

In fact, you could argue that the employee should contribute even more than the employer.

After all, it is the employee's retirement that the money is ultimately intended to provide for.

If people had to contribute something themselves, perhaps they would also have a greater understanding of where their retirement income was coming from and take more responsibility for providing for their own future.

I know there are arguments on both sides of this. I'm not an economist, nor am I claiming to have the answer.

I'm simply looking back at it from the position I was in at the time — a business owner who was required to keep finding more money to pay into somebody else's retirement fund, while trying to make sure there was enough left to provide for my own.

And perhaps that's why, when I eventually reached retirement myself, I had rather different feelings about superannuation than I might have had if I had spent my working life as an employee.

Retirement — Was It Really Going to Be Like This?

Looking back at working, business, superannuation and the retirement I thought I was heading towards.

I have never been particularly materialistic.

There have been several times during my life when I have owned a home outright. Looking back, though, perhaps having a freehold home and a successful business wasn't enough of a challenge for me. On more than one occasion, I sold the business.

In theory, that should have left me with very little stress. No business to run, no employees to worry about and no daily responsibility for keeping the whole thing going.

I could relax.

I could take up a hobby, read, or simply find something to occupy myself.

And perhaps that is what I imagined retirement would eventually be like.

But here I am now.

At this stage of my life, I find myself having to rent a home in a location that isn't really where I would like to live.

The place I would really like to be is Redcliffe. Unfortunately, rental prices there have gone through the roof, and currently they are simply beyond what we can comfortably afford.

The home we are living in now is actually good. It is only about five years old and is comfortable enough. But today we were presented with a new six-month lease at $550 a week — a $50 increase.

So, realistically, we don't have much choice but to sign it.

At the same time, we have two other rental applications in.

One is for a two-bedroom apartment in Scarborough at $660 a week, which, to me, feels far too much for us.

The other is a three-bedroom town house in Kippa-Ring at $540 a week, but unfortunately, it is close to a very busy five-way intersection.

And this is where I find myself asking:

Is this what I imagined retirement would be like?