Retirees share their journeys

We asked for your stories if you were finding life as a retiree challenging. Here are two. Pat explains her fears, while Lorraine offers a solution.

Pat Isaacs, 73, Peregian Beach, Queensland

It is definitely getting harder to survive. My only income is the Age Pension. I have no super, or income from anywhere else.

My house was 30 years old and I was still paying a mortgage, wondering where I would get the finances to do essential repairs to my home. Or should I put it on the market? Then where would I live? I certainly couldn’t afford to pay rent out of my pension.

Eventually I secured a reverse mortgage, paid what was owing on my housing loan and did some repairs. But I will run out of money before I can get much more done.

I can possibly draw down more, but the interest is piling up in the meantime.

I do find it easier to survive not having the mortgage payments, but the way everything is increasing in price means I won’t be ahead for too long, I fear.

 By the time I’ve paid rates, body corporate fees, phone, internet, electricity, insurances, fuel and other car expenses, there is not a great deal left for food, and other essentials. Meals out almost never happen. Entertainment is usually beyond me.

I do wonder what I will do if costs keep rising, and whether there will be anything left for my family when I am gone. I had hoped to travel in my retirement years, but this is becoming less likely.

This year I will need surgery on my feet and knee and I have a hernia which needs repairing. There is no chance of getting that done in the public health system any time soon. I can’t afford the private health cover premiums or the gap payment of thousands of dollars.

Despite all this, I have a good life. I have friends and, at 73, I still have much to offer. I am active in my community, working with homeless people, refugees and caring for the environment. I still have a lot to give, as long as my health doesn’t break down.

I would like to see the Age Pension increased to enable people to have a better quality of life.

Lorraine Cobcroft, Pottsville, NSW

I’m not doing it tough now, but I did for nearly three decades, and many of my friends are struggling.

What concerns me is that our inefficient and excessively expensive retirement funding system is failing the neediest, and the Government keeps applying Band-aids instead of overhauling the entire system to fix its flaws.

Our pension system is unfair in the extreme – discriminatory, inadequate in supporting the neediest and complex to administer. It encourages manipulation and cheating and harshly punishes endeavour and responsible planning, driving many to arrange their affairs to draw higher pensions than should be necessary.

Rather than tweak the system to falsely claim cost reductions while hurting hundreds of thousands and discouraging saving and planning, the Government should be conducting the full review and overhaul of the system that the Greens sought when they, foolishly, agreed to an assets test that assumes a 7.8 per cent-plus investment return rate in a five per cent average return rate environment.

We pay generous pensions and concessions to retirees with multimillion-dollar homes, retirees who gifted generously to their families before turning 65, retirees who spent up big cruising the world and partying, retirees who earn over $70,000 a year, and retirees with younger partners with huge superannuation balances. The system incentivises marriage break-ups and unofficial co-habitation, by discriminating against couples.

It pays absolutely no regard to the age of a retiree who may need hard-won savings to last another 30-plus years; to health and care needs that may impose high living costs, or to the effort and sacrifice that might have resulted in a savings nest-egg that now delivers little or no advantage – or even disadvantages the saver over those who have half as much.

The retirement ‘sweet spot’ invites retirees to lash out on expensive world cruises or unnecessary home extensions. It encourages workers to minimise their superannuation contributions unless they can achieve over $1.5 million, aided by some $37 billion annually in superannuation tax concessions that enrich the well-off and do little or nothing to assist strugglers to build their retirement nest-egg.

A universal Age Pension has often been proposed as the solution to this mess. I’d like to suggest an alternative that may be more affordable and acceptable to taxpayers.

Include the family home in an assessment of assets, but assess assets only to fix a deemed income, determining pension entitlement based solely on the higher of each individual’s actual or deemed income in excess of a generous threshold.

This removes disincentives to save, eliminates benefits of manipulating, improves fairness across the board and simplifies administration.

Over time, it will result in huge savings over a system that dis-incentivises saving, enabling increases in the basic Age Pension rate to relieve aged poverty.

What you said – comments from YourLifeChoices’ members

To reach retirement age and yet be totally reliant on welfare smacks of irresponsibility bordering on stupidity. Anybody who finds him or herself in just such a situation is in no wise position to be placing further demands on the public purse. Suzanne

Why isn’t financial literacy taught at school instead of cooking or jewellery making. Or Shakespeare’s plays? That is where an independent retirement starts. Not when we reach 60 and realise we have no money. Stof

Nobody can be expected to live within their means when their income is virtually stagnant and the prices of essentials are skyrocketing. Look at the price of electricity. I guess “live within your means” means turn the lights off and freeze to death in cold weather? Rainey

Good financial management skills need to be instilled as early as possible. If you wait until you start working, you have left it too late. If you wait until you stop working, you have little chance of success. Ex PS

The broken system we have is fast collapsing and the far right have no idea how to fix the disaster they have created. Rae

I have no idea how anyone manages on a pension. It’s fine until you need more than just food and clothing, i.e. the roof gets a leak or the oven breaks down etc. Then you need to step into the real current world of tradesmen who seem to charge phenomenal wages for their time. Rosret

I hate to think what the future two generations will suffer as we go forward. The world changes so much now and the governments have not taken strong enough steps to make sure all are okay. John


Related articles:
Backyard Baby Boomers
Age Pension increases
Retirement index explained

YourLifeChoices Writers
YourLifeChoices Writers
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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