By Brendan Cox | General Manager
Here I am over half way through my working years, putting my kids through school, paying off debt and looking forward to retirement at the age of 60 or 65 as that is what my parents did. They did well enough on a single income, raising seven children and putting us all through private school education. If I follow their lead, I should be sitting pretty as I only have three children and we have one and a half wages coming into the household. But in the words of John Lennon, “Living is easy with eyes closed” ….
Then I read the Governments Intergenerational Report 2015 and some key statistics have me thinking about my retirement planning calculations. The report highlighted that Aussie men are ranked number one in the world (along with Iceland) for the longest male life expectancy….AWESOME! Our Aussie female counterparts are not too far off, ranked fifth in the world behind Japan, Spain, France and Italy….so as a nation not too bad. The other great element of the report was that both Australian men and women are likely to live longer without disability – from the so-called healthy life expectancy guide. So with all this good news, why am I questioning my retirement assumptions?
The fact is that when my parents were my age back in 1974/75, less than 10% of the Australian population were over 65. Today, those over 65 account for 15% of the population and in 40 years’ time they will form nearly 25% of the Australian population. It gets me wondering at what point should I retire and, given life expectancies and increasing health support throughout the nation, at what point can I afford to retire in order to enjoy my retirement. The chart that ‘disturbed’ me the most was the one that showed the number of Australian centenarians across the same time periods. Forty years ago we had 120 centenarians in Australia. This year the Government expects approximately 5000 and in 40 years’ time they expect 40,000 centenarians in Australia…..that is 300 times the centenarians alive in 1974/75.
As a nation, we have had compulsory superannuation since 1992. My employers and my superannuation contributions will certainly assist me in my retirement, however I am working today in order to provide for my family and then take what I consider to be well-earned time off with my wife in our retirement years. As the Intergenerational report shows us, these retirement years are not short lived. Retirement for Australians is a new opportunity to truly live and enjoy the next long chapter of our lives. I need to ensure that my financial plans of today will assist me in creating the lifestyle opportunities I think I deserve in my retirement. I am glad Aussie males and females are amongst the longest living males and females in the world. The challenge for me now is to ensure I can truly live (not just exist) in my retirement years. I am comfortable I will achieve my retirement goals as I remain engaged with my trusted financial planner who continues to challenge me today in order to create the degree of financial comfort I need to enjoy my retirement. I encourage us all to take a moment and assess our existing plans.
In 2069 I hope to be one of the 40+ thousand Australian centenarians. If, like me, at your 100th birthday you plan to throw a huge self-funded party for all your kids, grandkids and great grandkids, then you need to start planning now….speak to your financial planner and party planner today.
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