Almost 30 years ago compulsory super began to spread throughout the workforce. For all of this time retail, industry and corporate super funds have struggled to enthuse their members’ about superannuation.
How can people be made to feel enthusiastic about their superannuation?
It seems to be well known that Australians are living longer. But what does this mean in our own lives when many of us benchmark our potential lifespan against our parents and other relatives especially if they didn’t live to an old age?
If you think your lifespan might be shorter than the published averages because of your own ancestors’ experience, then you need to think again. The Human Genome Project shows that our future lifespan is primarily based on who we ourselves actually are and not on what has been given to us by our ancestors.
Another problem with considering aging is that some people will think that getting old is something best avoided. They might expect that their later years will be a time of frailty, poor health and drudgery.
The reality for most of us looks like being very different.
To understand why we need a bit of background information. According to the last life expectancy tables published by the Australian Bureau of Statistics, a 65 year old male has an average life expectancy of 19.2 years. According to the life tables during the mid 1970s, males who were 56 had an average life expectancy of 19.3 years.
From this we can see that over 30 years male average life expectancies have improved considerably. Over the same period female average life expectancies have been increasing but at a slightly slower rate.
As this point in time there seems no reason to expect that life expectancies won’t continue to increase at their current rate into the future.
The bottom line is that we can expect to live longer than previous generations.
It’s all very well living longer but what about quality of life? In June 2014 the Australian Institute of Health and Welfare (AIHW) published Australia’s Health which contains some fascinating research about this issue.
The AIHW concluded that “not only are people living longer, but … older people, on average, gained more years of life without severe or profound limitation than with it.”
What do they mean by “severe or profound limitation”? It means that you sometimes or always need assistance with self-care, mobility or communicating.
AIHW estimate that a woman aged 65 in 2012 could expect to have 75 per cent of her remaining life free of disability or, at worst, with some disability but nothing involving a severe or profound limitation. The AIHW research says that males aged 65 in 2012 can expect 80 per cent of their remaining years to be largely free of significant disabilities.
In related research published in November last year the AIHW showed that our active years later in life have been growing more quickly than the increases in average life expectancies. At present males can expect 2.1 years less in disability free years than females. In 1998 this gap was 4.1 years.
Overall it seems clear that we should be planning to be healthy once we stop work.
From this we can conclude that we’re on the whole living longer and we can reasonably expect to be healthy for most of our life. In fact old age major health problems are typically for only a relatively short period of time for most people.
In our retirement years we’ll have reasonable health and will therefore have the physical capacity to be active for most of this time. It goes without saying that an energetic life costs money so to provide for our late golden years we’ll need money put aside.
One tax effective way to save for this time in our future is superannuation. To find out about your accrued superannuation entitlements to-date, ADF members should visit www.csc.gov.au and consider engaging the services of a licensed financial adviser through the ADF Financial Advice Referral Program at www.adfconsumer.gov.au.
ADF Financial Services Consumer Centre