Poor health to affect retirement savings

AMP and the National Centre for Social and Economic Modelling (NATSEM) have released a report entitled Going the distance – working longer, living healthier.

The report looks at how Australians age through their sixties and whether they will be healthy enough to work longer.

Research found that working longer will be a challenge for one in four men and one in five women who are predicted to be in “fair or poor health” when aged 60-69 in 2035.

“In 2035, the majority of retired or unemployed Australians in their sixties will not have enough superannuation for retirement,” the report said.

“If the pension age is raised to 70, many Australians will need to consider working longer to have an income and build more retirement savings.”

It was also predicted that for Australians currently in their forties and in poor health, 65.1 per cent of men and 72.1 per cent of women will be unemployed when in their sixties.

Close to half of Australians currently aged 40 to 54 who are in very good health are likely to see a decline to “fair or poor health” by 2035.

Commenting on the results, AMP chief customer officer Paul Sainsbury said the report showed health will be an important factor for many Australians in being able to save for retirement.

“We know more years in retirement places more strain on our superannuation balances so it’s likely many of us will need to work longer,” Mr Sainsbury said.

“This raises some confronting questions, in particular, how healthy we will be in the later years of our working life and what our financial position will be.

“Rather than simply working longer, we need to re-think our approach to retirement,” he said.