Hope for the best, plan for the worst? Insights into our planning for a longer life.


Australians are enjoying among the longest life expectancies in the world, a trend which is expected to continue.They are also being asked to do something not previously required of their parents and grandparents, namely, to save for a longer life than expected. However, there is limited availability and take-up of financial products that can assist individuals to efficiently manage the risk of outliving their savings. The growing fear that Australians’ saving behaviour is not keeping pace with increasing life expectancy is also now a major issue around the world.

The best explanations why people save for later life are based around self and family interests and, in some instances, social responsibilities. The challenge of ageing is to make earnings from 40 to 50 years of work cover 80 to 90 years of life. Two problems arising with this are that people take the present more seriously than the future and regard very old age futures negatively. They don’t necessarily think about their ‘future self’ in a nursing home as the same person as their ‘current self’. There is now growing evidence that better positive connections to a future self and thinking of one’s future self as having social responsibilities improves the motivation to save for later life. Unfortunately, people need to make current sacrifices in service of their long-term interests to resolve many of our most pressing social and economic issues. The failure to save enough to pay for later life was apparent in the evidence collected for this study.

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