Baby Boomers Are in Trouble - Baby Boomers have Baby Savings
Baby Boomers Are in Trouble - Baby Boomers have Baby Savings
The baby boomer retirement generation is coming to a big shock. Women baby
boomers (those aged from 45 to 60) have just $8,000 or less saved in
superannuation. Male baby boomers have a relatively modest $87,000 in
superannuation. Half of the baby boomers retiring at the moment have less than
$30,000. This research, by Simon Kelly from the University of Canberra's
National Centre for Social and Economic Modelling, confirms the fears that we've
all had about the boomer retirement which is that there will not be enough to
live on in the manner they are accustomed to and they will start draining money
out of the system as they all go onto the pension. Dr Kelly has said most baby
boomers are going to have a fairly modest retirement.
This influx in boomers retiring is obviously going to set off demands for an increase in the aged pension and thus higher taxes from a dwindling pool of workers. All this is in part due to a late entry into superannuation schemes, particularly by women but also by men. These boomers can actually thank Paul Keating. Thanks to his initiative many years ago to make superannuation compulsory we now have $1 trillion in superannuation, and hopefully people retiring in the next 15 to 20 years will have a far better retirement, or far better start to a retirement, than those retiring today. Those who are at the other end of the boomer scale i.e. the youngest, aged 45-50 now should concentrate on retirement savings and building up as many assets as they can. No one has ever complained of too much cash in retirement.
At Halogen we do drone on about starting sooner rather than later, about building up assets and contributing to your superannuation fund, and generally getting your financial situation in order. But is anybody out there listening? Alas, you wouldn't think so. Maybe we need Dr Kelly to keep saying it over and over again. Sadly, we are not good at creating wealth unless we are forced to.
How do we define modest?
The Association of Superannuation Funds of Australia estimates it costs $45,000 a year to have a comfortable retirement lifestyle - we wish. I wouldn't call $45,000 a year for those retiring a comfortable lifestyle; for most people I know it wouldn't quench the thirst of their 20-something children still living at home. I totally disagree with these estimates that are put on 'comfortable lifestyle.' I heard that $365k capital sum would sustain a comfortable lifestyle. What is that? Three to fours years of current salary to many households! Oh, and don't forget we are all living on 108% of our current income. This means of course that when the money runs out the baby boomers will have to make do with the aged pension, which is $13,000 a year for a single and $22,000 for a couple. This will cause all sorts of social and financial problems for the boomer generation in retirement.This influx in boomers retiring is obviously going to set off demands for an increase in the aged pension and thus higher taxes from a dwindling pool of workers. All this is in part due to a late entry into superannuation schemes, particularly by women but also by men. These boomers can actually thank Paul Keating. Thanks to his initiative many years ago to make superannuation compulsory we now have $1 trillion in superannuation, and hopefully people retiring in the next 15 to 20 years will have a far better retirement, or far better start to a retirement, than those retiring today. Those who are at the other end of the boomer scale i.e. the youngest, aged 45-50 now should concentrate on retirement savings and building up as many assets as they can. No one has ever complained of too much cash in retirement.
At Halogen we do drone on about starting sooner rather than later, about building up assets and contributing to your superannuation fund, and generally getting your financial situation in order. But is anybody out there listening? Alas, you wouldn't think so. Maybe we need Dr Kelly to keep saying it over and over again. Sadly, we are not good at creating wealth unless we are forced to.
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Margin Lending | Stock Trading | Stock Market Crash | Tips | Quotes | Property Boom | Baby Boomers | Mortgage Trust
Reduce Tax | Buying Shares | How To Invest | Investment Scams | End Of Financial Year | Building Wealth
Oulook 2006 | Investment Types | Property Trust | Market Investment