8th Jul 2018
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Retirement Affordability Index June 2018
Author: YourLifeChoices
Retirement Affordability Index June 2018

We’re living longer and as YourLifeChoices members are well aware, there’s good and not so good involved in that – extra years to enjoy, extra years to fund. The Government has visions of us working until 70 and is feeling the pressure of escalating health-care costs – as are you.

In this June edition of YourLifeChoices’ Retirement Affordability Index, The Longevity Issue, we explore the challenges – for government budgets, for support services, for your planning. The content is extensive – and revealing.

• We analyse the Federal Government policy to continue to push the Age Pension age out to 70 and ask thought leaders for their views on whether this policy is fair.
• ACOSS senior adviser Peter Davidson explains why affordable health and aged care is a critical component of a secure and dignified retirement.
• The Australia Institute senior economist Matt Grudnoff examines the health-care burden on retirees and how rising costs are hurting one retirement tribe in particular.
• Aged Care Steps director Louise Biti details why aged-care costs must be a critical part of your financial planning.
YourLifeChoices members Des, David, Catherine, Patricia and Cesar share their hopes and fears about living longer.
• We detail the components of the Government’s More Choices for a Longer Life package in Federal Budget 2018, with a particular focus on one – Comprehensive Income Products for Retirement (CIPR).
• Plus, we present the weekly, monthly and annual costs in key categories of expenditure across our six retirement tribes for the March quarter and a budget planner for you to keep track of your own household costs.
• And, finally, we review the latest government changes that may have a big effect on your retirement income.

So here it is, the June Retirement Affordability Index™ ready for you in ebook format and to download in PDF format. Or for a refresher on the best way to access it, follow Drew's instructions.

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    COMMENTS

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    Kathleen
    9th Jul 2018
    8:47pm
    Thank you for this yet again. It is always welcome and helpful. We have always made a budget and it is reassuring to know that one stays viable even though expenses continue to rise. People have different expenses and we don’t drink regularly or smoke at all. The latter is especially expensive. We also don’t dine at restaurants. A big pot of chicken soup with heaps of veggies and pearl barley and herbs is inexpensive and great in this very cold winter where we are.
    Noodles
    21st Jul 2018
    9:43am
    Well staying on the dole, then Newstart and now the Aged Pension seems to be the chosen lifestyle of a guy on ACA last night. 37 years he has not worked and he is now 72. I find that appalling. You cannot tell me he could not find a job in all that time...I do not believe it for a moment.

    This has to be stoppped before more and more choose this path. The country cannot afford to have people unemployed from 35 years old until they get the aged pension.
    OnlyGenuineRainey
    22nd Jul 2018
    8:21pm
    I agree, Noodles, but I'd like to know more about this man. There are reasons why people like him don't find work, and trust me - it's seldom just laziness. And punishments or imposing hardship won't solve the problem. Honestly, the government has NO IDEA how to address this. Life on the dole is NOT good. People who live this way have a psychological problem. They need help. They may just need an opportunity. If they have applied for a lot of jobs that they know they are suited for and been knocked back over and over, they may just give up believing in themselves. Hopelessness is a terrible thing to suffer.

    I've seen instances where a highly intelligent and skilled person can't get satisfying work because of lack of formal qualifications and experience. They may struggle for a time in menial unskilled jobs, but the mental health issues that creates overwhelm them and they become, quite genuinely, very sick or psychologically disabled. It's very easy for those of us who haven't experienced this to dismiss their problems as ''trivial'' or ''made up'', or to simply label them as ''bludgers'', but in reality they need help. Trying to understand the problem properly might lead to a solution, whereas just condemning them and saying ''this has to be stopped'' achieves nothing positive.

    I know a person who has faked disability all her life. She is highly intelligent. She used government funds to secure an honours degree at university (well into adulthood), yet did not even attempt to do anything with it. She boasts that she has learned to ''navigate the system'' after being repeatedly challenged and kicked onto Newstart temporarily, and having to fight to get back on DSP. Why anyone would want to live like that confounds me, but what I know for sure is that her life is not enjoyable, and only someone with a serious mental problem would choose it.


    I had to cheat to get off unemployment benefits and build a business of my own, because I simply could not get even moderately satisfying work. Years of poorly-paid, menial, boring work nearly destroyed me. I knew I was intelligent and skilled and capable. I knew I could do many jobs far better than the ''qualified'' people who were chosen over me. I eventually proved that to be true, but the system wouldn't give me a fair go. I had to either work in unsuitable jobs that were destroying me and my family, or bludge on the dole. Striving simply wasn't permitted! I paid my dues. I eventually employed quite a few people, paid taxes for nearly two decades, and am still working now - well past retirement age. I'll probably never draw an aged pension. None of that would have been achievable if I'd played by the rules. No wonder some people end up making the choice this 72-year-old made! Stopping it will take a lot of enlightenment and some radical changes in attitude, and I don't see the elite ever acknowledging a need to reform their thinking.
    OnlyGenuineRainey
    22nd Jul 2018
    2:08pm
    It's reassuring that there is SOME (not nearly enough) recognition of the issues raising the retirement age creates for those whose bodies are worn out, but there is NOT a sensible plan to protect them from financial devastation or abject poverty. The policy should NEVER have been proposed without first addressing the problems it would create for that sector of society.

    It's obvious that increasing numbers of retirees puts strain on the Federal budget. What concerns me is the lack of innovative and progressive thinking among decision-makers and influencers. The reality is that technology is reducing the need for labour. To suggest that people should work longer is NOT a solution to the problem of funding retirement when the need for workers is reducing. Business profits are soaring due to reducing the use of labour and using technology instead, yet the government is reducing tax on business. That's WRONG. The profits should be shared to reduce work hours and work years in accordance with the reduced need for labour. By letting business keep all the extra profit and grinding workers into poverty, the government will return us to feudal conditions and an unhealthy class structure.

    The other indicator of lack of vision is the stupid change to the assets test that ignored income-generating capacity, age, and future needs. Of course funding aged care will be problematical if people who saved for that cost are forced to spend their money prematurely because of an unfair assets test. Why is income-generating capacity and age not considered? $850,000 is a lot more money in the hands of a 90-year-old than a 65-year-old couple, yet the assets test does not differentiate. Neither is there any consideration of known future needs due to health issues, for example.

    And finally, the government seems incapable of comprehending that needs-based welfare creates need! People are being advised to - and are - spending more than they need to because they cannot benefit from having extra savings. That reduces saving for retirement and imposes a heavier burden on the taxpayer. It's STUPID. A universal pension and a sensible taxation system would be far more logical and beneficial for the nation. Or if they must means test, test the greater of INCOME or DEEMED INCOME at current interest rates. That way, those who are less able to invest profitably are not unfairly disadvantaged. Currently, those who can earn big returns are heavily advantaged, and those who can't are deprived of their savings and ground progressively into hardship - so many simply elect to buy expensive homes, gift 5 years before claiming a pension, or spend up big on luxury cruises etc. It's hard to condemn them when government policy disadvantages them for being honest and ethical!

    We need to get rid of this stupid archaic mentality that is focused solely on saving the government money by taking it from the people. We need much more progressive and innovative thinkers in power. And we need a government with a social conscience and empathy for those who are doing it tough. Sadly, I think it's unlikely to happen!
    OnlyGenuineRainey
    23rd Jul 2018
    3:00pm
    Check out the YLC post answering a question from recent immigrants who wonder if they can get an aged pension here despite having spent extended periods out of the country in the five years they have resided in Australia. No wonder the government is talking of raising the retirement age and whining about us all living longer and costing more! Why are those who paid taxes in Australia for 4 or 5 decades deprived of pensions while these recent immigrants, who aren't even committed to living here full time, receive them?
    mollyluff@yahoo.com.au
    23rd Jul 2018
    3:30pm
    Without doubt the Age pension age of 70yr is well on the way to becoming a reality.
    This then begs the question - those of us over 75 yrs. who are fortunate enough to be able to continue in the workforce - why are we not allowed to continue to make personal contributions to our Super Funds? Many of us, particularly women, did not have the privilege to have a Employee Super Fund until a much later stage in our lives.


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