- living in retirement
- financial planning your retirement
- managing life’s risks
- getting ahead financially
how retirement has changed
that was then…
After many decades of service – usually with the same company – it was time for the farewell bash, the gold watch and thanks for the memories. Retirement was short, retirees’ expectations were minimal and the age pension almost universal. As recently as 1968, the average Australian could only expect to live until the age of 71.
For the lucky few with sufficient capital to fund their own retirement, traditional post-employment investment strategies were pretty straightforward. Avoid the sharemarket, move your investments to safety-first defensive assets and live off the interest.
…this is now…
Fast forward to the present day and the picture has changed drastically. Medical advances and healthier lifestyles mean that life expectancy is now at 82 and rising – indeed, for a couple reaching the age of 65, there’s a 50 per cent chance that one of you will live beyond the age of 92.*
This means new retirees can look forward to 30 years or more of retirement. And at the same time, the onus is shifting towards individuals taking personal responsibility for planning their own retirement.
…and this is the future
Over the next 40 years the number of people aged over 65 will almost triple, from 2.8 million today to around 7.2 million in 2047 – that’s from around 13 per cent of the population to over 25 per cent.
As more baby boomers head towards retirement, more people will move from accumulating assets to unlocking their capital in order to provide a regular and sustainable income to fund their lifestyle in retirement. The income will either supplement their salary as they transition from full-time employment or deliver a reliable income for those who have retired.
The combination of increased longevity, changing demographics and rising expectations is creating new challenges for investors to ensure their retirement savings last the distance.