Living longer is usually viewed positively. However, if one’s assets are outlived, longevity can be another story entirely: The 2015 HSBC Future of Retirement report states that 72% of working-age Australians are concerned they will run out of money in retirement.
Australia’s retirement system is recognized for its strength – the Mercer Global Pensions Index for 20141 ranks Australia’s retirement system as #2 of 25 countries overall and #4 for sustainability.
Currently, most retirees achieve a ‘Comfortable’ living standard2 by combining their savings with a full or partial age pension from the government, which about half the population now relies upon at least partially. Those scheduled to retire in the next five years, according to a white paper on retirement by the Australian Actuaries Institute3, are planning to rely mostly on the age pension, which right now comprises 44% of the total retirement income for Middle Australia (50% of the population).
The older cohort is growing fast: according to the 2010-12 Australian life tables, the average 65-year-old male in 2011 could expect to live to 86, and 2050, to age 914. In addition, those 65 and older will increase by 2055 to 23% of the population, so instead of 4.5 working-age people supporting every over-65 individual, in 40 years there will be just 2.7. Read More +