Older Australians failing to plan for longer lives spent in retirement

Older Australians are failing to plan later in life, despite increasing life expectancy

New research by National Seniors Australia found that a quarter of people had done no planning for a longer life.

National Seniors Research Director Professor John McCallum said that life expectancy at age 65 had increased by around 6 years since the 1980s.

“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,” said Professor McCallum.

The research, which is based on a survey of National Seniors members, found that only 3% planned to spend more money later in life. 61% planned to spend the same amount throughout retirement and 36% wanted to spend more in the early years of retirement.

“There’s also an obvious contest between spending on leisure activities such as travel, versus providing for better care. Australians have a negative view of later life and don’t think seriously enough about it,” said McCallum.

“People won’t be able to do this planning without clear direction and help,” he said.

“More than half the survey respondents (56 per cent) said ‘yes’ to the option of longevity insurance in superannuation for maintaining income past the age of 85.”

“The other option was paying 10 per cent of your savings when you retire to receive income for life once you reach 85. A total of 57 per cent of those surveyed said ‘yes’ to this, but 43 per cent said ‘no’, including 11 per cent 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.”

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