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 yesterday, 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 three per cent surveyed planned to spend more money in later life; 61 per cent planned to spend the same amount throughout retirement - like a regular wage; and more than one third (36 per cent) 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.
“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.”
The report comes as Federal Government spending on aged care topped $17.4 billion, or $4,500 per older person, in the last financial year.
Prof. McCallum said identifying practical options for saving was critical. People who hadn’t saved enough were depressed, even suicidal. A woman aged 83 said: “I know my money will run out before I die. I can only hope that I am struck by a bus before I become feeble and can’t care for myself.”
Others mentioned suicide, an issue much discussed in the media recently.
“People won’t be able to do this planning without clear direction and help,” Prof McCallum 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.
“Better options for people to fund longer lives and the motivation to do so need to be provided. Even attractive options may initially need some government incentives and, maybe, compulsion.”
Click here to access the full report.