A Competitive Cash Option For Super Is Highly Desirable
Sydney Morning Herald
Friday January 2, 2009
I take issue with your editorial opinion ("Super needs the long view", December 29). Your advice not to retreat to cash mimics the same tired line dispensed by financial advisers who receive little or no commissions from cash term deposits. This advice does not apply to those folks who are a few years from retirement.
Your advice should be qualified, pointing out the dangers of riding out the long-term philosophy to the bitter end. This is not the first financial downturn, nor will it be the last. Today's retirees are staring at a 20 per cent drop in their lifetime super savings. Hearing that the loss could have been 48 per cent offers little comfort. The only advice from financial circles - government and private - is for these retirees to stay in the workforce for a few more years. And to think that we pay for this ingenious advice. Pre-retirees who wanted to switch their super to a cash fund were discouraged when they found that the super cash funds could only manage to pay roughly 2 per cent less than can be obtained on term deposit at any financial institution. A more prudent approach would be for super funds to have a safe, higher-paying cash option and to routinely advise pre-retirees of this attractive option. Predictable term deposit rates may be boring, but at this stage of life a good night's sleep has a value that is hard to measure. Jim Rippon Marks Point
© 2009 Sydney Morning Herald
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