Are we doing enough to prepare for retirement?

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Baby boomers are ensuring that retirement in the 21st century is a vastly different proposition to the one it was for our parents and grandparents.

We are living longer, most of us have superannuation and many of us are working longer – sometimes just to stay socially connected.

Technology is changing the way we live and work, and campaigns against ageism are empowering older workers to continue working full-time, part-time or casually.

But … how many of us plan for retirement? And are governments keeping up with the changing face of retirement? 

The 2018 report, titled The New Social Contract: a blueprint for retirement in the 21st century, by the Aegon Centre for Longevity and Retirement, runs a critical eye over retirement worldwide through an annual survey.

The report surveyed 14,400 workers and 1600 retirees in 15 countries: Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Turkey, the UK and the US. 

Aegon chief executive Alex Wynaendts says that in a world where responsibility for preparing for retirement is shifting from governments and employers to individuals, we need to ensure that there is universal access to enable people to save for retirement. 

“Financial institutions, community groups and other non-profit organisations need to work together to develop long-term saving products and services that encourage people to save when they can. By doing so, we will be able to serve otherwise vulnerable groups, such as those working on a freelance basis or taking time out of work to care for family and loved ones.” 

The report identified nine essential features of retirement in the 21st century:

1. Sustainable social security benefits that serve as a meaningful source of guaranteed retirement income and avoid risk of poverty among retirees.

2. Universal access to retirement savings arrangements for employed workers and alternative arrangements for the self-employed and those who are not employed due to parenting, caregiving or other responsibilities.

3. Automatic savings and other applications of behavioural economics that make it easier and more convenient for people to save and invest.

4. Guaranteed lifetime income solutions in addition to social security benefits. Education for individuals to strategically plan how to manage their savings, to know how to avoid running out of money, and to have knowledge of the options to help them do so. Governments, employers and others should increase awareness and encourage individuals to take advantage of opportunities to have a portion of their retirement savings distributed in the form of guaranteed income, such as an annuity.

5. Financial education and literacy so individuals understand basic concepts and retirement-related products and services. Individuals must be able to ask good questions and make informed decisions. Financial literacy must be integrated into educational curriculums so that young people learn the basics of budgeting, investing and managing their savings – skills that can serve them well for the rest of their lives.

6. Lifelong learning, longer working lives and flexible retirement to help people to stay economically active longer and transition into retirement on their own terms – with adequate financial protections if they are no longer able to work.

7. Accessible and affordable healthcare to promote healthy ageing. Governments play a vital role in sponsoring and/or overseeing healthcare systems. Employers should provide healthy work environments and consider offering workplace wellness programs.

8. A positive view of ageing that celebrates the value of older individuals and takes full advantage of the gift of longevity.

9. An age-friendly world in which people can “age in place” in their own homes and live in vibrant communities designed to promote vitality and economic growth for people of all ages.

Do you agree with those recommendations? Is Australia doing enough on all fronts? 

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Written by Janelle Ward

4 Comments

Total Comments: 4
  1. 0
    0

    I read as far as “Sustainable social security benefits” and stopped there.
    The current government was supposed to increase deductions into superannuation to 15% but they left them stranded at under 10% to benefit their wealthy business supporters.
    All we have seen is attacks on retirees and continuous attacks on the family home in attempt after attempt to push more people of a government pension whilst not providing sufficient retirement incomes into superannuation accounts.

    Lets talk about a different retirement than out parents and grandparents. This can’t happen until superannuation is properly funded, something the current government has steadfastly refused to do.

    • 0
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      Mick there have been no attacks by the current govt on the family home. It won’t happen. It would be electoral suicide to do that by any political party. I can see both major parties maybe introducing a death tax on assets. It is easy money for them to grab. Re Super…Super is currently at 9.5% employer contribution. Rising for the next years ahead. Remember also that Labor were the ones at this past election that were going to deny retirees a credit on franked dividends if they did not earn enough, whilst all politicians and the rich would all be able to claim that credit back against their tax. I would lose 7000 dollars pa and the pollies would still be able to offset the franking credit against their tax, so they retain their standard of living while I suffer. Is that fair? This was a Labor policy that only hurt retirees and not themselves. That is not the Labor party that I have voted for and stood by for and volunteered to work for on an election day. To let you know I was a union rep for 20 years till retirement. I am a life member of that union due to my work with our members. Don’t slam this current govt without slamming all parties. I have seen that all parties are as bad as each other. What we need to do is form a seniors union to push back against attacks on both sfr’s and pensioners and dsp’s. We need to stop trashing each other on this site and move forward together. We need to work together whether we are pensioner or Sfr or Dsp. We need to push back any policy by any govt that forces any retiree or disability sufferer to be disadvantaged. Divided we are weak. Together we are strong. We then have a voice that will be heard.

    • 0
      0

      Mary:

      1. there was the cry to downsize…which would have resulted in a lower or no pension. People would then fritter away the capital (whilst saving the government pension payments) and later go on the pension leaving their children zip.
      2. there are regular comments on bringing the family home into the asset test with the pseudo government Grattan Institue mostly running the commentary.
      3. Super – are you living under a rock or just ill informed? Since Abbott got in the rising employer contributions have effectively been FROZEN. That means most employees will NEVER be able to save enough to retire on. Official figures corroborate this but the right wing media NEVER tell the story about why super contributions have not reached the 15% they should now be at.

      You are correct at joining together but what you do not discuss is the Murdoch and Stokes media (the main players) who lie and distort the real political news and groom their own party, the coalition. This is the perversion which puts the current policyless crooks in suits back into office again and again. Voters are too stupid to see they are being done over so they keep making the same mistake.

      Yes LNP and Labor are both bad in their own ways but no party I have ever seen matches up to the current lot trying to bring about its fascist dictatorship. You’d think even half intelligent voters would understand this when the media comes under attack and organisations like GetUp are on the menu as well. Do you?

  2. 0
    0

    Mick, I agree with your comments, however every-one should also be prepared to put in a little extra of their wages to increase their super pot. I know some will say that some people can ‘t afford to put in extra. Those that really cannot afford to put in extra are the minority and I believe that people really need to responsible for building their own nest-egg.

    The federal politicians in the last 20 years have all been interested in feathering their own nests and do not care one fig for the people who elect them.

    Out with the lot and take away their so called entitlements, just like they took away the pension entitlements of 93,000 part pensioners and took away a large portion of 374,000 other part pensioners.


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