With life expectancies continuing to rise, can your retirement savings last the distance?
Australia has an ageing population. With the Baby Boomer generation reaching retirement age, research shows that nearly onein six people living in Australia today is over 65 years old. As recently as 2012, that number was one in seven.
Not only are more people reaching retirement age than ever before – they’re also living longer thanks to advancements in modern medicine and improved knowledge of how to live a healthy lifestyle. And while a long retirement is something to look forward to, it can make a big impact on your retirement savings.
So how will your retirement compare to previous generations?
1. You’ll be retired for longer
Average life expectancies in Australia have increased significantly for both males and females. Males who are currently 65 years old are expected to live to 86.9 years and females to 89.2 years. In previous generations, people could expect to live for ten to twenty years after they retired. Now, it’s common for people to spend up to thirty years in retirement– and in some cases, even longer.
2. Your retirement will cost more
Living longer means you’ll need more money to fund your retirement. The Association of Superannuation Funds of Australia estimates that a couple will spend $60,604 each year to pay for a comfortable retirement, while a single person will spend $42,953 pa. Even if you qualify for the maximum Age Pension and Pension Supplement, those payments will cover a little over half the amount you need for a comfortable lifestyle. That’s why you need to make the most of your super savings.
3. Your retirement savings need to keep working hard after you retire
Withdrawing all your super when you retire and leaving it in cash is unlikely to provide you with enough money to fund your retirement. To maintain a healthy income, you need your super to
To give you peace of mind that you won’t run out of money, you may want to consider using part of your retirement savings to set up an annuity. An annuity can provide you with
Seek help from an expert
If you want to know how to make your retirement savings last the distance, speak to your OBT financial adviser to find out whether an annuity could be suitable for you.
For specific advice, speak with your OBT financial adviser on 5462 2277. Rodney Turner and OBT Financial Group are Authorised Representatives of Lonsdale Financial Group Ltd ABN 76 006 637 225 | AFSL 246934.
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Information is current at the date of issue and may change. This information and certain references, where indicated, are taken from sources believed to be accurate and correct. To the extent permitted by the Law, Lonsdale, its representatives, officers and employees accept no liability for any person that relies upon the information contained herein. Information is current at the date of issue and may change.
- Australian Bureau of Statistics, ‘Census of Population and Housing’, 2016
- Challenger and Thomson Reuters, ‘Retirement and Aged Care Planning 2017-18’
- The Association of Superannuation Funds of Australia, ‘ASFA Retirement Standard’, June quarter 2018. Figures quoted are for homeowners.
- Age Pension rates are current as at 20 September, www.humanservices.gov.au