Australian retirees’ happiness on the slide, index finds

Australia’s global retirement ranking is dropping as fast as the official cash rate.

retirement index

As the Government builds towards its much anticipated retirement income review – even if the exercise appears to be a review rather than a fix – the need for such attention on retirement has rarely been in sharper focus.

Australia’s global retirement ranking is dropping as fast as the official cash rate, sliding three places since last year to ninth.

The Natixis Investment Managers Global Retirement Index assesses 44 countries on factors that drive retirement security, including health, finances in retirement, material wellbeing and quality of life.

Australia’s slide occurred as a result of lower year-on-year scores in quality of life and finances, according to Natixis.

Focusing on the positives, it said that compulsory superannuation lay at the heart of our “relatively high rating”.

Natixis chief executive Damon Hambly said that Australia's superannuation system was the envy of many countries and provided retirement security; however, balances were too low, particularly given an ageing population.

“As the baby boomers continue to age out of the workforce, the responsibility for contributing to the public pension system will fall more and more onto younger workers’ shoulders,” he said.

“The challenge is that higher old-age dependency ratios can significantly impact public finances as governments struggle to pay for rising social security obligations from falling tax revenues.

“Which is why our retirement age is set to increase to 67 in 2023. Along with Denmark, we are the first of a number of OECD countries to take this step – the United States and Spain are next in 2027.”

Mr Hambly said another potential solution was to encourage more people to continue working longer, potentially past retirement age. But most important of all was helping Australians to understand the importance of investing for the long term, and starting as early as possible.

Natixis managing director for Australia, Louise Watson, said that the gap between super balances for women and men was also having a significant impact on retirement outcomes for Australians.

“Australian women retire with on average 47 per cent less superannuation than men, yet they are likely to live five years longer – so it's really important that we work together as an industry to find ways of closing the gap,” she said.

“Not just in terms of superannuation balances, but in striving to improve wage equality as well as women's general level of financial literacy – so more women are empowered to take control of their own financial future.’

Iceland, Switzerland and Norway were the top three for the third straight year. They were followed by Ireland, New Zealand, Sweden, Denmark, Canada, Australia and Luxembourg.

The UK and the US were ranked 17th and 18th in the world respectively. The index concluded that retirees in the Czech Republic and Israel could expect a better standard of living once they stopped work than those in the UK and US.

The report shone a light on Japan’s demographic time bomb, saying its mediocre ranking at 23rd was a result of a mix of very good and very bad outcomes.

Japan has the highest life expectancy of all the countries ranked, giving it a high score for health outcomes in retirement. However, it also has one of the lowest fertility rates in the OECD. As a result, it was one of the lowest performing nations for old-age dependency, government indebtedness and happiness.

Has your retirement suffered in the past year? Can you understand why Australia’s ranking has dropped?

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    COMMENTS

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    Retiring Well
    3rd Oct 2019
    10:29am
    Something is very wrong if it's money that makes you happy in retirement.
    leek
    3rd Oct 2019
    10:38am
    The right amount of money is important for everybody. You don't want to be struggling
    to pay bills when you are old, and with failing health.
    Kaz
    3rd Oct 2019
    11:26am
    I think the current govt has made having money essential but harder to get
    Mad as Hell
    3rd Oct 2019
    12:22pm
    Having my money stolen by the very caring LNP with the 2017 changes to the Pensioner Assets Test made me sad.
    Rae
    5th Oct 2019
    6:32am
    Money doesn't make you happy. But not having any money when you need it for something essential can make you unhappy. Money adds to freedom.

    Problem is the politicians are from wealthy families, mostly private schooled, always had enough money for whatever they needed and just can't empathise with those doing it tough due to lack of funds.

    The solution is saving but the RBA are making that hard right now. Saving like crazy and having next to no economy because no one will spend or borrow. Like third world countries have to do.
    inextratime
    6th Oct 2019
    6:15pm
    So VCB, going without power and missing meals to make end meet makes you happy.
    Never read so much BS in my life.
    hyperbole
    8th Oct 2019
    11:04am
    Saving is done when you are in the workforce. It is called planning for your retirement. Many never thought the day would come and they were ill prepared.
    Kaz
    3rd Oct 2019
    11:24am
    I must admit for the first time I’m questioning Australia’s reputation as a fair and supportive place to live. Some other countries are looking attractive for retirement...
    hyperbole
    8th Oct 2019
    11:02am
    Not for me another country. This is my home where I and generations before me lived. Not all is greener on the other side I can assure you. People say NZ is better. Oh yeah? Look at the cost of living over there and you will decide otherwise.
    Farside
    8th Oct 2019
    4:18pm
    With ageing global populations it is inevitable there will be competition for cashed up retirees who can live a better quality of life in a different country. Ask those retiring to Thailand, Malaysia and so on whether they intend repatriating.
    Blinky
    3rd Oct 2019
    11:37am
    Super is an oxy-moron x people wirh medium to low super savings.
    People with BIG supers ($600k or more) are lucky because they are independent from Centrelink and the threats to the pension system politicians n financial "gurus" come up with every now n then.
    If you have SOME super, i.e. $400k or less, you need the Aissie pension. This means you will be subject to the ever-changing, scare-mongering changes to the pension system and MOST OF ALL, to the tight, miserably low ASSET TEST.
    U see? It is an oxy-moron because your $400k in super means that you will be getting less pension because you will be over the asset test threshold. In other words, your super is counter-productive, i.e. you are pun8shed x having some super while people with no super or with a mini-weeny super, say $200k or less will get A FULL PENSION.
    SUGGESTION: INcrease the asset test or exempt the first $200k in super from the asset test.
    This will reward pensioners who worked hard, got some super n msybe even salary sacrificed a few dollars x their retirement.

    But, who is listening???
    Horace Cope
    3rd Oct 2019
    11:51am
    To look at the statements individually:
    "Natixis chief executive Damon Hambly said that Australia's superannuation system was the envy of many countries and provided retirement security; however, balances were too low, particularly given an ageing population." It's not rocket science to understand that baby boomers started working in the '60's and the compulsory super started at 3% in the '90's so there will be a shortfall for those who commenced having super.

    “As the baby boomers continue to age out of the workforce, the responsibility for contributing to the public pension system will fall more and more onto younger workers’ shoulders”. And thus it has always been. My taxes weren't set aside for me, they were used, in part, to pay pensions and welfare for those who needed it while I was working.

    “Australian women retire with on average 47 per cent less superannuation than men, yet they are likely to live five years longer – so it's really important that we work together as an industry to find ways of closing the gap”. This is very easy to answer, have women work as long and for the same hours as the men. It is hoped that Labor's idea that a special payment be made to women to compensate them for not working and therefore not being eligible for super is not allowed to be implemented.

    “Not just in terms of superannuation balances, but in striving to improve wage equality as well as women's general level of financial literacy – so more women are empowered to take control of their own financial future." It has been many years since wage parity was introduced in Australia. There are no awards that specify a difference a difference for gender so we have wage equality. There is a difference in those professions where salary is negotiated and perhaps women need to be more forceful in demanding a similar wage to men. If women are content to accept a negotiated salary that is a win/win, not a political scoring session.

    As to the questions, "Has your retirement suffered in the past year? Can you understand why Australia’s ranking has dropped?" Our retirement hasn't suffered in the past year. I have no idea why Australia's ranking has dropped because we are not privy to the methods used to make such a statement.
    KSS
    3rd Oct 2019
    12:30pm
    Don't forget that many women work fewer hours overall than men which would also result in a lower wage (e.g. child bearing, returning to work part-time, caring for parents etc) and therefore, a lower superannuation balance.But this does not equate to inequity in pay scales. A man with the same job and similar absences from work would also have the same low superannuation balance.
    Paddington
    3rd Oct 2019
    6:02pm
    KSS, that sounds like inequity to me. Maybe the males should bear the babies and look after the family etc if women are disadvantaged. Maybe count the work that women do and balance the scales. Many women are on their own as well. A lot of men do this family stuff too so it should count for something. Undervaluing what people do that is not paid should perhaps be addressed. Although women are supposed to be doing most of the housework all the blokes I know are doing the brunt of it. Back to the first point though women should be compensated for childbearing and losing their place in the rat race to the top jobs. My mother used to say that all would be sorted if males had the babies.
    KSS
    3rd Oct 2019
    7:22pm
    Who says women are 'meant to be doing most of the housework'?

    Why should women be compensated for child bearing? They are already entitled to their job back at the same level as when they took leave. They are allowed to opt for part time hours and this can go on for up to two years. Compensation enough. Any supposed loss should be part of the decision to have children in the first place and that includes counting salary and superannuation in to the costs of having children. It has absolutely nothing to do with pay inequality. Work less, get less. That is the same for men and women. Women are not special and do not deserve special treatment. If women want equality then they must expect the same treatment as anyone else and stop playing the gender card.
    Captain
    3rd Oct 2019
    5:54pm
    What happens to the superannuation of the men who die 5 years before their spouses?

    Does that suddenly disappear or do the spouses receive it? Of course it is the spouses.

    More to the point is the lack of financial knowledge of both males and females.

    To my mind if you reach 50 and don't understand how finances work then you are in trouble. Take control of your life and learn, learn, learn. It is easy to let someone else manage your finances and consequently manage your life. Don't moan and groan about your financial lot in life if you choose to have no input into it.
    Skiing
    3rd Oct 2019
    11:12pm
    Well said
    hyperbole
    8th Oct 2019
    11:00am
    Agree totally!
    Farside
    8th Oct 2019
    4:20pm
    "Don't moan and groan about your financial lot in life if you choose to have no input into it." ... what he said.
    Franky
    4th Oct 2019
    9:11am
    Easy to see why Australia is dropping n the rankings. Lower interest rates do nothing for retirees confidence to survive, and the resulting lower exchange rates make travelling overseas ever more expensive. The A$ is one of the worst performing currencies in the world right now, and another result will be an inflationary effect on all things imported. Of course the government produced inflation rate will not reflect that, as usual.
    Franky
    4th Oct 2019
    9:11am
    Easy to see why Australia is dropping n the rankings. Lower interest rates do nothing for retirees confidence to survive, and the resulting lower exchange rates make travelling overseas ever more expensive. The A$ is one of the worst performing currencies in the world right now, and another result will be an inflationary effect on all things imported. Of course the government produced inflation rate will not reflect that, as usual.
    Rae
    5th Oct 2019
    6:27am
    All these stories about needing to save and meanwhile the RBA does it's very best to hurt savers and force them into risky investments. Sorry but none of it makes any sense anymore.
    hyperbole
    8th Oct 2019
    11:00am
    There are lot of happy retirees around not all gloom and doom as painted at all!


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