Not all seniors are rich
The widely-held image of older Australians as wealthy and under-taxed is a myth, according to National Seniors Australia.
The advocacy organisation’s Interim CEO, Professor John McCallum, said today recent National Seniors’ research had shown that almost a third of Australians aged over 80 had exhausted their retirement savings and another quarter of 75 to 79-year-olds were in the same boat.
The median value of assets held by retirees was $300,000, with 84 per cent owning their own homes and 15 per cent having a house mortgage.
Prof. McCallum said today that frugality in retirement was not motivated by the desire to leave an inheritance, but because of caution and uncertainty. While most retirees rated income for life as one of the most important goals, the reality for many was very different.
“Our research, based on a survey of more than 5000 retirees, showed 80 per cent considered having income for life as the second most important goal,” Prof. McCallum said.
“The only goal with a higher rating was the desire for regular and constant income, with 84 per cent.”
Prof. McCallum told the 4th International Conference of Long-term Care Directors and Administrators in Sydney that Australians had among the longest life expectancy in the world, with women aged 65 in 2016 expected to live to 87.3 years and men 84.6.
“The problem is despite many older people being aware of increased longevity, later life – and particularly nursing homes – is viewed very negatively.
“Residential aged care throws dark shadows over old age, and who wants to plan for that? As a society, we’ve also over-emphasised the risk of dementia so that every memory lapse is seen as a symptom.
“We have to want our futures to want to plan for them.
“Despite financial worries, just over half (56 per cent) of the retirees who completed our survey had made a financial plan for living longer.”
Prof. McCallum said the same survey revealed retirees considered covering health and aged care costs very important (75 per cent).
“Our research is showing that older Australians need more help planning financially for old age,” he said. “They need alternative investment options to the sharemarket – many remain wary of another Global Financial Crisis a decade on – and there are opportunities for the superannuation industry to step up here.”
9 August 2018.