Have you Planned for a Long Retirement?Written on the 11 October 2022 by Parkside InvestorPlus ) The recent passing of Queen Elizabeth II at 96 was a reminder that, regardless of your stature, retirees are now, more than ever, living longer. While the Queen had the best possible medical care available, the same is true for most Australians. Our medical system, access to world class health care and critical medicines has helped to promote our longevity. In Australia, the average life expectancy of both males and females is now over 84 years of age, considering that at the start of the 20th century, the average life expectancy for both males and females was around 57 years! If you’ve chosen to retire at the spritely age of 65, then chances are you will live for another 15+ years – specifically, if you are a male, you can expect to live for another 20 years and if you’re female, another 23 years. And with rising living costs, current support services and infrastructure, it’s no surprise that many retirees are underprepared for a life expectancy of 90, let alone 96! This then raises the question; how comfortably retirees can live in later years if they’ve not prepared for it. Also, regardless of how good our health-care system is, no one can remotely predict how long they will live – remember, the only certainties in life are death and taxes, however, you can foresee taxes! Working for longer, however, creates uncertainties about when we will retire once and for all. More than three in five (62%) retirees surveyed say that they did not plan the exact age they would retire. Among those not yet retired, the vast majority (85%) say they have not planned their desired age to stop working. The impact of living longer in retirementWithout a doubt, two of the biggest concerns for retirees are: 1. Will I have enough money in my retirement 2. Health care Will there be enough in the ‘super tank’?Despite having one of the best superannuation schemes in the world, research has shown that there is a gap for many retirees, and savings don’t keep pace with longevity, which means some will run out of money – especially now given the rising cost of living expenses. It’s reported that 1 in 4 Australians are expected to outlive their savings by more than 10 years, with a retirement savings shortfall of around $187,200 per person. Worrying that your money will run out in your retirement is one of the biggest concerns of pre-retirees and retirees. This is where sound advice around the following areas is a key, ideally before retirement;
Aged care needsAs you get older, it can be more difficult to do those day-to-day things on your own. For example, you may need help with cleaning, attending doctor’s appointments or even just moving about. Aged care is the support provided to older people who need help in their own home or who can no longer live at home. Examples of aged care include;
Just from the list above, you start to understand that there are costs associated with each of these requirements. It’s vitally important to ensure that the right amount of aged care costs have been factored into your later life financial planning. Unfortunately, though, as we’ve seen from the critically low number of Australians who are financially prepared for aged care, the vast majority will fall short. If you are a pre-retiree or have just entered your retirement phase, Parkside InvestorPlus will provide you with valuable advice to maximise your next phase life – to achieve a comfortable and happy retirement. We have a qualified specialist in this area and who will provide the right advice for your needs. You can contact us or call us on (02) 9899 4899. Author:Parkside InvestorPlus About: As advisers, we act as a fiduciary sitting on the same side of the table as our clients, providing peace of mind, greater control and visibility. |
