Australians are living longer but many are failing to plan for it, new research from National Seniors Australia shows.
The report, “Hope for the best, plan for the worst? Insights into our planning for a longer life”, released last week, was based on a survey of National Seniors members conducted last year.
Lead author of the report, National Seniors Research Director Professor John McCallum, said that life expectancy at age 65 had increased by around six years since the 1980s, which meant Australians must now do something their parents and grandparents didn’t think about – plan for a longer life.
The research showed a quarter of people hadn’t planned at all for a longer life and those who had weren’t planning for its last phase.
Just 3% surveyed planned to spend more money in later life; 61% planned to spend the same amount throughout retirement - like a regular wage; and more than one third (36%) said they wanted to spend more in the early years after giving up paid work.
“Earnings from 40 to 50 years of work may have to cover 80 to 90 years of life, but medical and aged care bills tend to get higher as we get older and few people are ready for this,” Prof McCallum said.
Retirement funding options
He added that more than half the survey respondents (56%) said ‘Yes’ to the option of longevity insurance in superannuation for maintaining income past the age of 85.
Prof McCallum said: “The other option was paying 10% of your savings when you retire to receive income for life once you reach 85. A total of 57% of those surveyed said ‘Yes’ to this, but 43% said ‘No’, including 11% who did not think they would live that long.
“What needs to be done is to give better options for people to fund longer lives and the motivation to do so. Even attractive options may initially need some government incentives and, maybe, compulsion.”