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Will your super be enough for retirement? Part 1 | 7.30 - YouTube
Channel: ABC News In-depth
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as we go about our working lives many of
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us are too busy and distracted to pay
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much attention to our superannuation if
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they're not in a good performing fund
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then they can be condemned to a poorer
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retirement compulsory super has turned
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us into a nation of serious savers
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collectively investing 2.7 trillion
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dollars the money's pouring into
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superannuation it's pouring in that's
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more than enough to buy all the
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companies on the Australian Stock
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Exchange the question of whether people
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are getting value for the money that's
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been pouring in is now on the table and
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you can see that probably over a couple
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of decades now I haven't been getting 30
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or the value they should have
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this is quite serious in Australia where
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we have compulsory superannuation which
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is itself a very complicated structure
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and involves interacting with risky
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asset markets and a lot of things that
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people otherwise wouldn't be thinking
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about or taking on I never really
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considered life beyond work I mean it
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was always a an illusionary sort of idea
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that you hoped you know would occur one
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day better I didn't give it serious
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consideration I didn't give retirements
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and serious consideration
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Taichi helped 69 year old retiree Peter
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bastok deal with the stress of work and
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now of retirement he started paying
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superannuation about halfway through his
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working life as a newspaper journalist
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and editor certainly equilibrium is
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something that is very heavily tested
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yeah but superannuation just wasn't on
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my horizon and you know for that I'm
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personally negligent because you know
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and now I'm living living with the
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consequences of not having a larger
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nesting like many Australians Peter has
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always found superannuation confusing
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and it's a pressing issue now that his
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health is failing accountant Jenny Lynn
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has come over to help him make sense of
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it most people would pull all their
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super out and pay off their mortgage and
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then live on the age pension well only I
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still have an outstanding walk yet which
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would well and truly eat up not only
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that but also by other mmm essays yes
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Peters old paperwork reveals that when
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he changed super accounts he was asked
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to pay a one-off advisor fee of more
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than two and a half thousand dollars
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that makes me irate that that that's
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happened well I have no recollection of
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meeting an advisor financial advisor and
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there's no names of any advisor on any
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of these forms
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it seems like a huge slug to me Peter
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situation is quite typical in that he
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worked through a period where he wasn't
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earning superannuation and then went
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into employers several employers that
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paid superannuation but he was never
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interested in his superannuation or it
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always just happened the problem in
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superannuation is this for most people
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that I choose to go into it the money is
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taken out of their wage by law they know
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they can't get hold of it for 20 or 30
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or 40 years they don't feel as if it's
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theirs they don't feel as if they own it
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the government concentrated on getting
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money into superannuation by law but
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didn't show much interest in what
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happened to it
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basically said now it's someone else's
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responsible a plan that's either a
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multi-billion dollar blunder or one of
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the most farsighted and progressive
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policies in our nation's history it's a
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probably small affordable manageable
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cost which will give astray lien workers
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a decent standard of living in
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retirement and build a pool of national
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savings there are gonna be literally
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billions of dollars spewing forth from
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superannuation companies every year the
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foundation of Australia's compulsory
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super system was the Accord struck
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between the hawke-keating government and
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the union movement in the 1980s like
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many other significant social reforms of
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the 80s and the 90s that grande compact
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between government employers and and the
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union movement delivered men created the
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superannuation system
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workers gave up a demand for a 3% pay
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rise and put that money into
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superannuation instead for an adequate
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and mature level of contribution to be
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established I suggested by the year 2000
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we reach a national benchmark where each
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and every employee has a contribution to
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superannuation equal to 12 percent of
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wage and salary income paid into his or
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her superannuation account
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despite determined opposition compulsory
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super began in 1992 I asked the Prime
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Minister why won't you have the decency
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to admit that your superannuation levy
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means that workers will either have to
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take a pay cut or lose their job
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Keating's plan to increase compulsory
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contributions never eventuated the
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Howard Costello government later
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scrapped Labour's deal to deliver tax
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cuts not as cash but is increased super
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Paul Keating would say that you're
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partly responsible because he he blames
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a lot of people for a lot of things and
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you know we did we just left in place
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the schedule that had been announced I
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think it capped out at 9 but it that by
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stopping that process that incremental
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increase was meant to occur it's meant
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they'll have had this unfinished
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business sitting there with our
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superannuation system since and that
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that I think was a fundamental error of
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that government and in an era that we're
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still paying for today
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employers currently contribute nine and
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a half percent of workers wages to super
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and the rates not legislated to reach 12
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percent before 2025 if it were the case
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that people actually wanted to become
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entirely independent of the age pension
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for example they would probably need to
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start contributing to super at a rate of
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about 18 percent at the beginning of
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their working life and contribute at
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that rate all the way through their
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working life most of us are I think
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probably realistically not prepared to
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do that if you truly want to become
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independent of the government a
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self-funded retirees live our super
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inner you're gonna have to put your own
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money in the occupational superannuation
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is not going to do it
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42 percent of Australian retirees still
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received the full age pension since 1997
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the proportion of Australians receiving
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full or partial age pensions has fallen
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from 79 to 70 percent I really thought
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that I would just keep working and then
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just one day I would just die but it
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sort of didn't work out like that I
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didn't expect to be you know 81 now and
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still be alive and still needing things
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still enjoying shopping everything like
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that well you need money in her 80s
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Robyn Doherty lives in Sydney entirely
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on the age pension like many women who
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took time out of the workforce to raise
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children she retired with very little
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super and doesn't own her own home the
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system I think has failed working women
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and one of the big flaws in the system
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was not recognizing that inequity in the
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original design of the system
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retirement it was something I didn't
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even really think about I had only been
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in superannuation for 16 years and I
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didn't see it we were never shown
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anything to tell us that this was really
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for our future to keep us going when we
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retired so that's just what happened
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Robin's husband died young and so when
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she retired from her job in hospital
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administration she moved to Bali to live
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with her daughter her age pension was
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enough to live comfortably there until
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her deteriorating health brought her
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back to Australia I didn't realize I was
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homeless actually and I'm in my source
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of looking for somewhere to live I met a
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woman from UnitingCare that's how I got
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on to them and and I told her my story
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and she said you're homeless and I said
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no no I'm not homeless I have a good bed
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every night I've got children that look
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after me I'm fed well I'm not homeless
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she said yes you are public housing in
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Sydney's inner West now keeps a roof
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over Robins head how is your experience
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different to those you know that were
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better prepared I think they're going on
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more cruises than I'm going on I have
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friends who I've known for years and who
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did well and you know they had help over
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the years but I enjoyed my life before I
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got old so I'm not at all you know
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envious of them maybe sometimes
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compulsory superannuation has been
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phenomenally successful at forcing most
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Australians to save but how that money
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is invested and the costs that incurs
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can have a dramatic impact on your
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retirement income at the moment we have
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a very unique system a very large system
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but it's probably the worst retirement
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savings system in the world except for
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all the others and so the system
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actually does need a lot of refining
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it's not perfect and it's got a long way
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to go
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