Australia is confronting significant social and economic issues associated with a large and rapidly growing aged population.
It has been estimated that people need to save at least 15% of their annual salary for their entire working life to provide an acceptable standard of living during their retirement. Now think about your retirement savings (for most people it is held in the form of superannuation), how much are you saving? If it’s always just been the compulsory superannuation contributions made by your employer (currently at 9.5% since 1/7/14), then you are likely to have a substantial gap between your desired lifestyle in retirement and the lifestyle that can be funded by your retirement savings!
If you think you will be able to rely on the Aged Pension provided by government to cover the shortfall you may want to think again.
Interestingly, when the Age Pension was introduced in December 2010, the Age Pension age was set at 65 years, which was the life expectancy of a 16-year-old male at the time. It may sound harsh, but you weren’t expected to live long enough to get the pension!
Another interesting fact, in 2010, there were 5 people of working age to support every person aged 65 and over. Alarmingly, it is projected that by 2050 there will be 2.7 people of working age for each person aged 65 or over. (Reference: Intergenerational Report 2010).
So the pool of funds available for the Age Pension will be considerably smaller and more people will be looking for a share.
At Sothertons Gladstone we encourage everyone to get actively involved in planning for their retirement, even if you are 18 and just entering the workforce. Failing to plan, is planning to fail, and your lifestyle in retirement is simply too important to ignore. Call our professional team on 4972 1300 to discuss your retirement dreams.