Most Australians will retire poor!
Written on the 5 September 2011 by James Cagney
The current cost of living will ensure most Australians will retire poor!
There will be over 7 million retirees and welfare recipients compared to approximately 12 million working Australians during the next 15 years. That means that the working Australians will end up paying more income tax to pay for these pensioners and social security recipients. Most people retiring today will live into their late eighties and with medical advances our children will live well into their late nineties and many will be over 100 years old. . How will the future workforce pay for this? We are paying huge taxes during our lifetime already and we will get nothing for it.
The shock however will be the galloping medical costs as the mortality rate increases year after year.Just take the increase in cancer patients which is costing the government an enormous amount of money right now. Think about this - each radiation and chemo therapy patient cost the government around $500 000 right now. Multiply that by the increasing number of patients and the money budgeted by the government for medical is dismally inadequate. The medical system will have to make some serious and tough choices in the future. Imagine this scenario - you are a 60 year old patient with a 25% chance of survival after Chemo and Radiation treatment and there is a 29 year old with a 40% chance of survival . Who will get first preference? If you think this will never happen - look at the list of the number of elderly people in discomfort day after day waiting for a hip replacement these days! Of course the government will never admit they will be faced with these choices - how can they - it's inhumane. Make sure you have private medical just in case or else you will have to sell your home to pay for the high cost of medical treatment in your retirement.
Many people just cannot grasp the reality that our money dramatically devalues over time and many of us will have to live abject poverty. For example: $120,000 of cash savings and Superannuation today will only be worth $60,000 in 20 years time. So if you are retiring today and you think "I'll be right mate, I have enough to live on" you are wrong. With the current inflation rate increasing at a steady rate, a loaf of bread that may cost $4.50 today will cost over $13.00 within 20 years. Imagine what it will be like when you have to Queue up for old bread because you can't afford fresh bread. In fact, with living expenses being what they are right now, there are reported cases of retirees freezing to death in their own houses in parts of Victoria and NSW because it costs too much to switch the heaters on. Retirees are going to live into their eighties and nineties and they barely have enough Super to survive for a few years after retiring. Ultimately, it comes down to merely existing until the day they die rather than living and enjoying their lives as they dreamed they would do. If someone had told you when you started working that your fate was to work hard for the next 40 to 50 years and retire in poverty I wonder how motivated you would have been back then?
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Author: James Cagney