Retirement
We’re living longer, but that’s not necessarily good news
The number of Aussie centenarians has topped 4,000 for the first time in history and this is a “wake-up call” for pre-retirees, a property investment group has said.
We’re living longer, but that’s not necessarily good news
The number of Aussie centenarians has topped 4,000 for the first time in history and this is a “wake-up call” for pre-retirees, a property investment group has said.
According to Property Club spokesperson, Troy Gunasekera, better living standards are to thank for the 552 Aussies who celebrated their 100th birthdays last year, bringing the number of centenarians to 4,078.
However: “These figures are a wake-up call for people saving for their retirement because in reality most people will struggle to fund their retirement years due to rising life expectancy.
“It is also a wake-up call to the federal government as more and more people will be forced onto the government pension because of the failed superannuation system.”
Increased life expectancies is a trend echoed around the world, Mr Gunasekera noted, pointing out that the number of centenarians will jump from 500,000 in 2015 to 3.7 million by 2050.
“These figures underline the reality that superannuation savings are simply not enough to see through most people in retirement – which for some people may now be more than 30 years.
“It has been recently estimated that an average Australian wage earner would need to save up to 20 per cent of their annual income and put it into superannuation for 45 years in order to achieve a comfortable retirement.”
The reality, however, is that this is a tricky thing to accomplish, he continued.
“That is why the average superannuation account balance is still very low. For example, the average superannuation account balance for males aged 60 to 65 is around $114,000 males and $94,000 for females.
“This is just enough money to cover the average people for a few years of retirement before they are forced to take the government pension.”
With this in mind, he called on the government to cut the red tape for Aussies wanting to use their super to buy property.
“In addition, [they] need to reverse their recent policy of forcing property investors to take out principal and interest loans which limits the ability of ordinary people to build a successful property portfolio to independently fund their retirement.
“For the first time ever, the big banks [are] now forcing mortgage holders to switch from interest-only loans to principal and interest repayments once the interest-only loan period expires,” he continued, arguing that these changes could see repayments jump by up to 50 per cent.
He contended that this in turn would see many property owners in capital cities sell, placing upward pressure on rents.
“Property Club is predicting that capital city rents will rise by at least 10 per cent over the next year as a result of this mortgage shockwave,” he concluded.
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