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May 24, 2016

Too poor to retire: More Australians than ever will work past 70

Don't let this be you!

More Australians than ever before intend to work beyond 70, as Generation X-ers and Baby Boomers fear they lack the financial security needed to retire any sooner.
The findings, which come as the Turnbull government weighs superannuation reform in the May budget, have sparked fresh concerns that a comfortable retirement is now "out of reach" for hundreds of thousands of low-income earners.
An analysis of Australian Bureau of Statistics data shows the number of over-45s who say they will not retire before turning 70 has dramatically increased, from 8% to 23% in a decade.
Childcare worker Kerrie Devir has worked for almost 35 years continuously, but has less than $100,000 in superannuation. pic 1.jpgPhoto: Paul Jeffers
Seniors groups say the figures indicate people are ageing in a much healthier way and want to keep working, but also reveal deep "financial uncertainty" among older workers following a series of superannuation and pension changes.
Retirement before 70 is "out of the question" for Melbourne woman Kerrie Devir, who has worked in childcare for 33 years.
"When I look into the possibility of retirement, it's a financial train wreck of massive proportions," she said.
"Because my wages have been so low and continue to be so low, superannuation just doesn't build ... 9% of a very little amount is still a very little amount when you retire."
Ms Devir said she had accumulated less than $100,000 in superannuation, despite having worked continuously since she was 17.
And with the rising national life expectancy, Ms Devir, a single woman, said she was worried she could be forced into poverty after she is no longer physically able to work.
With Australians living longer, there are concerns about how much money is needed to fund a long retirement. 
"On my mother's side, I have longevity, on my dad's side I don't," she said.
"I'm not sure that I want my mother's longevity ... that's not going to play out very well for me."
According to the ABS, the most common factor influencing people's decisions on when to retire was financial security (40% of men, 35% of women).
United Voice – the union representing some of the country's lowest-paid workforces – said the findings were an indictment on former prime minister Tony Abbott's decision to freeze an increase to employer super contributions, which had been scheduled to reach 12% by 2019.
"This was incredibly cruel and short-sighted and will have a devastating impact on workers," union state secretary Jess Walsh said.
"It is no surprise that more and more people are delaying their retirement."
Ms Walsh said the pension was clearly "not keeping up" and Australians were finding it harder to accumulate enough superannuation to top up the pension to a reasonable level.
"Our members work hard, they pay their taxes, and yet they can't afford to retire with dignity."
National Seniors chief executive Michael O'Neill said "People are saying, 'I thought I was going to live until about 75, but now it looks like I could be living a lot longer than that ... can I afford it?" Mr O'Neill said.
"Longevity has started to become a real issue."
"People need certainty about what benefits will flow over time ... and all the speculation around superannuation causes people uncertainty because they don't know where it is going to land," he said.
You do need to do something about your retirement.  Your wages and superannuation may not be enough to support you.  The superannuation industry have told us that you need $1,000,000 in your super to have enough.
If you don't have enough resources in your superannuation, do you want to retire on the pension?  If you do, go no further!

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But if you want to still be able to eat dinner out occasionally, obtain medical care with some choice, travel, have a car; then you do need to do something!
You may be confident in your ability on the share market.  Great, but that is a volatile business.  Shares are bought and sold all the time.
Another asset class is property.  We can help you with residential property investment.  Which is not a set and forget and an easy alternative either.  But it is much less volatile in its value that shares.  People do not buy and sell property many times over.  Prices go up, they may go down, then they settle.  There are times of quicker growth and times of slower growth.  But because we advocate buying and holding the property, the value ends up being a slower steady growth over time for us.
There are strategies needed for this process.  And that is also where we help you.
Don't think set and forget though.  There is administration to take care of, tax return considerations, you are dealing with people - tenants, agents.  Take time to visit your property.  It is a huge investment.  Get involved with its care - maintenance, Body Corporate.