What is the AIPN?

Who is James Cagney?

Over 94% of Australians will have a miserable retirement!

Written on the 5 September 2011 by James Cagney

Over 94% of Australians will have a miserable retirement!

Over 94% of Australians will have a miserable retirement!

Most people have no idea how much money they are going to need in retirement. The government-legislated 9% employer contribution into Superannuation and the gradual increases to 12% and 15% over the next few years, are hopelessly inadequate. Many countries in Europe have had similar schemes since the end of World War II in 1945. Some employers in these countries pay as much as 27% of the employees’ wages into their superannuation / pension funds. Even these people are running out of money in these countries, and their governments cannot cope with the number of old people they have to provide pensions and medical services to. The Australian government only introduced the compulsory Superannuation scheme in 1992, 47years later. If these European countries are struggling to finance the pensioners, how on earth is the Australian government going to cope with the ever-increasing number of baby boomers retiring over the next 15 years, that do not have enough Super to last more than 2 to 5 years? Last year the 1st of the official baby boomers retired - 198,000 of them born in 1945. About 95% will put their hand out for a government pension within the next 3 years as all the Superannuation they have will be gone. This figure will extend to around 300,000 people per year within the next 15 years - due to the bulk of the baby boomers being born in the the 1950's  -  before the introduction of the birth control pill when the birth rate then declined quite rapidly.

There will be over 3 million retirees and 2 million welfare recipients compared to approximately 12 million working Australians over the next 15 years. That means that we, the working Australians, will end up paying more income tax to pay for these pensioners - just for their minimum daily living requirements. The shock will be the huge cost medical costs to look after them as the mortality rate increases year after year. Multiply that by the increasing number of patients and the money budgeted by the government for medical costs, which is dismally inadequate. Most people retiring today will live into their late eighties and with medical advances, our children will live well into their late 90's and some well over 100 years . How will  the future workforce  pay for this?

The current pension of $350 per week, which is approximately 25% of the live-able wage in Australia today, falls way short for people to survive. Australians are doing it tough and will do it even tougher as inflation takes a bigger and bigger slice out of their Super, savings and pensions. Many people mistakenly think they will have enough money to retire because they will own a their home but do not realize that inflation halves the value of their money every 20 years, and unless these people want to have to sell the only valuable asset they have in order to pay bills, they are seriously mistaken. Another mistake more than 80% of Australians make is assuming that the mortgage they took out and eventually paid off was the biggest debt they would have in their life. The biggest debt they will ever incur, is in fact, is their retirement. They are going to have to plan to survive for 20 to 30 years after retirement. That is 20 to 30 years scrimping and scrapping for every dollar. What a future to look forward to.

Many Australians have the “She’ll be right mate” financial plan. Please do not rely on the government to support you in your retirement they don’t have the money! It will not be “right” mate. Some of my clients believe that they will just have to continue working until the day they die. Well that is not going to happen either. Over a third of retirees today had to retire because of health reasons – so you might not have the choice. You will have to retire and depend on the government for support. Good luck!

If you have read this far you are obviously keen to know more. However, knowledge without action is of no benefit. So you need to take action NOW. Attached is a Retirement Calculator that will show you how much you should have in income-generating assets at retirement age. This is based on how many years you have left in the workforce. I have given you an example of $60 000 per Annam (remember money devalues by half every twenty years or so). You are going to need $1 753 506 in savings , assets and Super to have $60 000 income. Do not take your equity in your home into the calculation because you are going to need a place to live and you can't eat bricks and mortar.  Click >>>> here for the retirement calculator. If you can’t fully understand how it works or need a professional opinion on how to invest for your future, we would be glad to help you. Just click >>>> here and we will contact you.

If you are interested in making your hard earned money work for you instead of letting it dwindle away in the stock market click on Investment Property>>> here. Don't be fooled - if you have Super you have shares because most Super funds are invested in the share market. Share spruikers will tell you that the share market is long term so hold on it will come back. They are sooo right - you have been putting money into Super since 1992 and the share market is back to 2004 levels - how much long term do you want to be in a declining market. Imagine what it must be like for those unfortunate people that are retiring right now, who do not have enough money to live because their Super is down 30% to 40%. Don't let that happen to you. Property has proven to be the safest investment over the past 110 years in Australia. Don't let somebody entice you to invest to make the quick buck. Property is not a get rich scheme it is a "get rich slow" scheme. Unlike those retiring today you still have a choice - take action today and click>>> here to contact us.

Please get a licensed professional help you to plan to adequately plan for your future using time proven and sound strategies. Contact us by clicking >>>> here and we will get back to you without delay. Do not say you will do it later because you need to make an effort not an excuse . Time is not your friend. The later you leave this the more pressure you put on yourself to save and invest. DO IT NOW!

Please go to www.jamescagney.com.au to see what services we offer to help you plan for your retirement.

Please note:
The information featured in this article is general in nature and therefore should not be solely relied upon as a solution to your personal situation.Before making any investment, insurance or financial planning decision, you should contact and consult a licensed professional who can advise whether your decision is appropriate to you.

Author: James Cagney
Bookmark SiteTell a FriendPrintMarketing and Business Problems