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Retirement should be a worry-free time of life, affording senior citizens freedom and comfort after decades of hard work. Unfortunately, the financial reality of many older Australians’ daily lives is far from ideal.
In this article, we take a look at some of the most common financial challenges faced by seniors and find out how you can avoid them.
Living a long, healthy life – and paying for it
Life expectancies are rising across the developed world, and Australia is no exception. A child born today is expected to live to 80 years on average (for males) and 84 years (for females). In 1960, the life expectancies were 67 and 74.
While longevity is something we all value, there’s no doubt that living longer costs more – and here’s why.
- Health care costs rise with age – these include daily medication, health checks and more frequent visits to the doctor and hospital as we get older.
- A quarter of our lives will be spent as pensioners – if you retire at 60 and live to 80 or older, you’ll be spending more than two decades living off your accumulated wealth.
Lower interest rates
Building an investment portfolio that’s big enough to provide for your retirement is challenging, and with low interest rates becoming the norm you’ll need even more capital to provide you with a reliable monthly income.
Debt – and reluctance to pay it off
Many Australians retire with debt still hanging over their heads – these include mortgages and credit cards, and even unpaid student loans that have been accruing interest for decades.Having to pay off old debts at an age when you are relying on retirement income is a risk that nobody should take – and a major cause of anxiety for retired over-60s. Paying off your debts before retirement (and preferably long before that) is essential.
If you’d like detailed advice on planning your own modern retirement plan, don’t hesitate – contact us today for a sit-down consultation that could change the way you live in your golden years.
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