Retirement and the age 65 go together like hand and glove. It is the one number most Australians could quote with certainty about our superannuation and pension system.

The age 65 has been enshrined in the way we define and plan our working lives. So changing it - albeit slowly and over six years - is a big deal.

The 2009-10 Federal Budget has been developed against a backdrop of the worst economic downturn in 70 years. The collapse in government revenue and the corresponding increase in government debt is staggering both in its speed and size - even if on a relative basis Australia is forecast to come out of the recession in better shape than almost all the other developed world economies.

Against a backdrop of a forecast budget deficit of $57.6 billion and a drop in tax receipts by $210 billion over the next four years it was no surprise that our super system has been called on to help fund some of the spending promises.

The most direct change to super is the reduction of salary sacrificed contributions that can be made into super from July 1 this year. This effectively halves the amount that can be concessional contributed (eg via salary sacrifice) to $25,000 for people under 50 with transitional arrangements for those over 50 continuing until 2012 but now capped at $50,000.

The non-concessional (i.e after tax) contribution cap is unchanged at $150,000 for the 2009-10 financial year.

The budget papers say this measure will affect about 170,000 individuals - 55% of whom are over 50. But the impact is significant because the savings are estimated to be $2.8 billion over four years.

Clearly the big challenge in super now is being able to get enough money into the system to take advantage of the (still) generous tax concessions within super and in particular the tax-free years when in retirement.

The more profound change may flow from the shift in the age we will be eligible to access the age pension. It seems likely that the preservation age for super will move to fall in line with the pension - although reportedly that has not been ratified but it is one of the recommendations of the Henry Tax Review that has been released this week along with the budget.

Now there is nothing magical about age 65 - after all it was set back in 1909 and hasn't been adjusted for our increasing life expectancy. But it has been one of those anchor points for career and retirement planning so it will be interesting to watch the reactions and behavior changes particularly for people around the cut off age. It's a bit like going on a road trip and being told you are nearly there, only to come across a road closed sign and the only way forward will add two years to the journey. So if you were born after 1957 you will now have to wait until age 67 to be able to access the age pension - and most likely your super.

Just how big an impact that will be remains to be seen. Today the majority of people do not wait until 65 to retire so the impact may be limited but it will clearly require different financial planning strategies to provide people with income until they are eligible for at least part of the age pension.

Legislative risk, regrettably, is a standard feature of any government mandated retirement system. But the changes to super around items like the co-contributions have at least been flagged as temporary - and even if they were not, where else do you get a government-funded 100% return if you are eligible for the co-contribution?
Ironically, whenever the government changes superannuation, financial planners are often beneficiaries. This time is likely to be no different.

You can imagine financial planners will be relieved at the idea of meeting with clients to talk long-term financial planning strategies - particularly after a solid market rally has helped restore a little health to portfolio values.