It’s not exactly news that most Australians are not investing enough to provide an adequate income in retirement.
A woman retiring at 65 today can expect to live, on average, to 87 – and a man to age 84*. Remembering that these are just averages and half the population will live for longer – we will probably need to fund ourselves for a considerable period of time!
Many people expect to be at least partly reliant on the age pension to supplement the income they are able to generate from their investments. But every year it gets harder for the government to continue to fund the pension (which even at time of writing is only a maximum of $366.85 per week)**. Today there are around 5 working age Australians for every over 65-year-old; within the next 40 years that will reduce to just 2.7***. Given that we are already having trouble balancing the books as a nation, it seems likely that the accessibility rules will get tighter, and the rates lower, over time.
The prospect of an extended period of poverty in old age is a pretty unattractive one. But remember – the earlier you take action, the better off you will be!
A major part of our business is helping people to define exactly what financial independence means to them, putting a plan in place to achieve it – and implementing that plan. If you’d like to find out whether you’re on track, send us an email by clicking on the “Enquire” button below. We will give you a call to confirm a few key details about your current situation, and assess whether a meeting might of value to you. Your first meeting with a Profile planner is at no cost and obligation-free. We will give you a detailed quote based on your personal situation and needs before proceeding further, so you can assess the costs and benefits of our services before you engage us.
* Life Tables Australia 2009-2011 (ABS)
** Australian Government Department of Human services: Full Age Pension (single rate) as at March 2013
*** Australian Government: Tax reform road map fact sheet: “Increasing the Superannuation Guarantee Rate to 12%”, 201