Australians have among the longest lifespans in the world, but are failing to plan financially for their later years, National Seniors Interim CEO Professor John McCallum said today.
National Seniors surveys over many years had consistently shown older Australians wanted regular, low-risk incomes in retirement.
“They want the equivalent of a ‘wage’ that gives them security and predictability,” Prof. McCallum told the Committee for Sustainable Retirement Incomes conference in Canberra. “The problem they face is the limited availability of suitable financial products that meet their needs.
“The Federal Government has taken steps to put in place a retirement income framework and encourage the super industry to provide comprehensive income products for retirement (CIPRs) to help retirees manage their longevity risk. But more action is needed.”
Prof. McCallum said despite 85 per cent of older Australians being aware of their increased life expectancy, only 50 per cent had planned for it financially and only three per cent were planning to spend more in their later years when health and care costs were highest. Underpinning this lack of action was negative views of later life and most people valuing the present more than the future.
“We need much more positive views of ageing,” Prof. McCallum said. “Residential aged care – or nursing homes – throw dark shadows over old age – no-one wants to plan for what is a grim future.
“An over-emphasis on dementia, despite its relatively low prevalence, also focuses on the negative, so that every memory lapse is seen as a symptom.
“In reality, many more people are working longer – into their late 60s and 70s – and they are feeling an average of 10 years younger than they are. But we must want our futures to want to plan for them.
“People won’t be able to do this planning without clear direction and help.”
Prof. McCallum said more than half of respondents (56 per cent) to a National Seniors survey 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,” Prof. McCallum said.
“A total of 57 per cent of those surveyed said ‘yes’ to this, and 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.”
Professor John McCallum is available for interviews.
Media contact: Lynda Schekoske 0488 047 380 or 07 3233 9134.