World finance :: Markets, Financial industry & Savings

Are your savings on track to give you a comfortable retirement




SUPER fund balances need significant fattening to catch up to the amount required to deliver a comfortable lifestyle come retirement.

New figures released by the Association of Superannuation Funds of Australia show balance targets are falling behind and immediate action needs to be taken to ensure the shortfall can be made up.

ASFAs Superguru retirement standard shows single people will need $545,000 in retirement savings and couples will need $640,000 to give themselves a comfortable lifestyle.

The data shows for a single person aged 30, females have a balance of $25,000 and males have $30,000 but to be on track to achieve a comfortable retirement they already need a balance of $50,000.

For a 60-year-old the findings are more concerning. Average female balances are just $130,000 and males are $250,000, but to achieve a comfortable retirement they should have $425,000.

But ASFA chief executive officer Martin Fahy says theres some easy steps people can take to help boost their super balances almost instantly.

Whether its finding and consolidating super accounts, salary sacrificing, looking at investment strategies and fees and charges, or simply working out how much money you need to invest to ensure you have enough for the type of retirement you aspire to, everyone should take an interest in their super,’ he says.

Super is your money so you should be actively engaged in monitoring and managing it.

A modest retirement for Aussies is one considered to deliver more income than the age pension but you can only afford basic activities.

A comfortable retirement is one that allows a wider range of leisure and recreational activities and a good standard of living includes what a person owns, driving a reasonable car, having private health insurance, good clothes and they can travel domestically and internationally.

Both budgets assume retirees own their home outright and have good health and these are their living standards at age 65.

Intrust Super chief executive officer Brendan OFarrell urges people to sit up and take notice of their super balances now before its too late to play catch up.

Mathematically, you have two choices, you can start early with your saving, which means any sacrifices you make early in your career will be bolstered by investment returns and the wonderful power of compounding interest,’ he says.

Alternatively, you can start late and start big by waiting until later in your career, youll need to make bigger sacrifices to catch up, and even if this is the choice you make you may be hindered by various types of contribution caps that limits the amounts that can be contributed.

@sophieelsworth

HOWS YOUR RETIREMENT TRACKING?

Single person earning $70,000 per year

Age What you need to be on track for comfy retirement What females have Males have

30 $50,000 $25,000 $30,000

40 $175,000 $45,000 $70,000

45 $215,000 $64,000 $100,000

50 $275,000 $80,000 $140,000

55 $345,000 $105,000 $190,000

60 $425,000 $130,000 $250,000

Source: Association of Superannuation Funds of Australia.

Australias biggest taxpayer ripoff is it time for the fat lady to sing




IS OPERA the ultimate waste of public money? We give them big sums, but not many people actually attend.

I have nothing against opera as an art form I have been and enjoyed it. I support arts funding in general. But opera is just one genre of live music and were clearly putting too much money into it.

Opera invented in Italy in the 16th century is not very popular in Australia. Opera Australia got fewer than 400,000 people to attend in all of 2015.

The amount of money we spend on it though? Substantial.

Opera Australia got $25 million from government last year. Plus the federal government gives millions to opera companies in Queensland and WA and South Australia.

The amount per person works out to be astronomical. Every time an opera lover drops their bum into a padded seat the taxpayer pays on average $45 towards their experience.

(Thats for operas put on by Opera Australia. If you go to see a show by Opera Queensland, the government has pitched in $194 towards the cost of your ticket. If you go to one by West Australian Opera, its $191.)

For comparison, the government pays $37 towards the cost of going to the doctor.

When you go out to see a musical or a band, or a comedian, how much government subsidy do you get? Not much is the likely answer. Why does Opera get special treatment?

EVEN OPERA COMPANIES ADMIT PEOPLE DONT LIKE OPERA MUCH

Opera Australia says Opera is enriching Australias cultural life with exceptional opera.

But to boost attendance numbers, Opera Australia puts on shows that are not really opera, just musicals.

In 2015 it presented Anything Goes. The year before it did The King and I, and South Pacific. If you take out the musicals, the number of people going to actual opera shrinks, and the subsidy per attendee goes up, dramatically.

In fact, in 2014, attendance for the two musicals was higher than all the 13 operas put together.

Meanwhile, other theatres show musicals and dont normally get taxpayers money for doing so.

There was actually a major review of opera funding last year and they insisted that government funding for musicals should stop.

The review did not insist all opera funding stop. In fact, it said the opera companies make a significant contribution to Australias cultural life.

But then again, the reviewers were the exact kind of very senior business people that opera traditionally attracts (plus a couple of people that work in the industry).

WHAT ARE WE PAYING FOR?

The point of arts funding in theory anyway is to support Australian people telling Australian stories. But Wagner didnt write Australian stories. And neither did Verdi, Puccini or Mozart.

Opera Australia does occasionally put on new Australian operas, but the audiences for those are modest, and explain why they mostly put on the big famous operas.

And, to be fair, Opera Australia runs a series of shows at primary schools, reaching 80,000 kids in Victoria and NSW. They charge $7 per student, a good discount compared to the $33 to $136 ticket price for a child to attend the opera Carmen in Melbourne next year.

It also does some regional outreach. Opera Australia also did a touring show of Mozarts The Magic Flute in 2015 that visited 17 venues and got another few thousand people along.

But what would happen if we cut public funding for opera? I suspect its posh patrons would rally together to make up the difference.

Philanthropists would be heroes for saving opera and they could sit in the box seats on opening night and listen to people make nice speeches about them. Theyd get clapped on the back at interval and chink their glasses with the other billionaires.

In the USA, opera is crawling with million dollar donations. Here, you can get your name on the list of donors for a measly $2000.

WATCH THE SOPRANOS? OR CHANGE THE CHANNEL?

When we spend money on opera, it cant be spent on other things.

Opera got less money than symphony orchestras but twice as much money as all other music, in the most recent grants from the governments arts funding body.

Why do we care more about Tosca than pop or rock or hip hop artists writing contemporary music about life in Australia? The funding opera gets each year could launch hundreds of careers in music genres with more appeal to most Australians.

Opera got about five times as much money as literature from the arts funding body. Yet I dont think anyone would deny great Australian books from Picnic at Hanging Rock to Possum Magic to The Slap are a more important part of Australias cultural heritage than Opera.

Lastly, Technology is changing in a way that makes funding opera look like worse and worse value. Season One of the YouTube series The Katering Show was made with a government grant of just $150,000, for example.

Its most popular episode has had millions of views. Even the least popular episode has had more views than Opera Australia got in attendees for a whole year. Its also a much fairer thing to fund, because you dont need to live in Sydney or Melbourne and have $100 spare to enjoy it.

All this is why we should consider whisking public money out of opera and spend it on things Australians value more highly.

Some people hear this argument and say: Why not fund everything? But thats a cop out. Someone earned that dollar and paid it in tax. We could spend it on hospitals. If we are funding arts, we must choose wisely. Opera is not likely to be our best choice.

Its probably time for the fat lady to sing.

Jason Murphy is an economist. He publishes the blog Thomas The Thinkengine. Follow Jason on Twitter @Jasemurphy

Taryn Fiebig is a principal soprano at Opera Australia. She talks to Alan Kohler about her love of the genre, what it takes to make it to the top and how failure gave her the steel to forge a success.