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Equity is good, but cash is king in retirement

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Superannuation and security for old age is on the minds of many.  But its not always easy to talk about it, especially for those who realise they don't have enough money for their retirement and they don't have enough time to earn much more.

The thought of cutting into superannuation to put a deposit on a house is dumb. 

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I thought it was very clever of Paul Keating to introduce the plan to ultimately set aside 15 per cent of a worker's salary as savings for old age. Successive governments cut down the ultimate plan which started at 9 per cent and unfortunately it will probably never get to the original target. 

People are deeply concerned about their financial security first and foremost. Owning a house can certainly help but as they say "cash is king".

I saw this first-hand with my dear old dad who regular readers know died on the morning of his 96th birthday last November. 

He was a proudly self-sufficient man who worked well into his 80s. 


I never asked him directly about the size of his "nest egg" but I always made sure that his modest needs were met in a way that didn't take away his dignity. 

From time to time I would quietly hand him some cash when we walked together in his beautifully kept garden by the Yarra River, outside Melbourne. He would raise a little smile and nod as he slid the bundle of notes into his pocket.

We carried out this ritual for some years because I felt sure that he appreciated the help with the usual mounting costs of life.

But he didn't spend it. He'd been keeping little stashes around the place. He had three of them. One of $10,000, another $3000 and another of $700. I had been told by those around him that he had become forgetful about his version of home banking. Not true. He was just being very careful and wanting to make sure that he would always be self-sufficient.

And he used to rotate the locations of the "sub branches" of his stand-alone financial system. 

"You mean he would hide them?" says Louise.

I know at one point he had the $10,000 in the sock drawer and one other in a Peter's Ice-cream container in the freezer that still bore the slogan "The Health Food of a Nation".

Some of his mates are certain that there was a fourth bundle of $300 stashed somewhere and knowing my dad he probably took that with him.

He would have worried that a larger amount could have burned a hole in his coffin.

Thankfully it all worked out fine in the end, but I'm not so sure about current and future generations, many of whom will live to 100 and beyond. If their super provisions are not enough, the costs will be a heavy impost on the taxpayers who will have to fund a massive pension scheme

Charlie points out, even though we are a wealthy country and have been through a once in a 100 year boom, people are anxious. 

Will we have enough to get through to the end? When will the end be anyway?

The only exceptions at the moment are the young people of course, but even with the world in front of them, some are starting to weigh up the benefits of adequate superannuation or getting to a housing market that could easily leave them asset-rich and income-poor.

Politicians should stop mucking around with superannuation and allow our people to at least have the security of knowing that their lifetime savings are safe from government manipulation and rearrangements.

There is plenty to be concerned about in the world without having to worry about how we can survive in old age.

I have the feeling that we are living in an accelerating cycle of insecurity. It's one of the reasons governments and leaders come and go quicker than ever before.

If our leaders could agree that our super is sacrosanct we might get what my dad had – certainty that he could get through to the end on his own terms, and have a little bit to take with him.