25% of Australians haven’t planned for a longer lifespan despite advances in life expectancy, according to a new research report titled: “Hope for the best, plan for the worst? Insights into our planning for a longer life”
New research by National Seniors Australia indicates that around 25% of Australians haven’t planned for a longer life span, despite the average life expectancy at 65 increasing markedly since the 1980. Further, those who had planned still hadn’t planned for the final phase of their lives. Only 3% expected to spend more money in later life, 60% planned to spend a steady, wage-like amount throughout their retirement. 35% planned on spending more in the early years.
Heart Financial Advisers Principal Stu Varidel commenting on this report said “Older Australians need to have a reality check about exactly how long their money will last and what they should do to plan for this possibility. An income 40 of work may have to cover 90 or more years of life. Aged care and medical costs bills will be higher as we get older and I believe that very few people are ready for this”.
“There’s also an obvious contest between spending on leisure activities and holidays, versus providing for better care down the track. We have a negative view of later life and don’t think enough about it,” Stu Varidel said.
The report, argued that there is a limited availability and take-up of financial products that can assist individuals to effectively manage the risk of outliving their savings. The majority who are planning for extended life spans, are planning for even spending over time, like using a wage, rather than for more in their later years when their needs will be highest, the report said.
We note that the federal government spent $18 billion on aged care in the last financial year, it is imperative that the federal government identifies practical savings options for older Australians.
The message here is that you need a clear direction and help when planning for retirement which can only come from an appropriately qualified financial adviser.
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