Australian life just keeps getting longer
A DECADE ago an Australian man who had just turned 50 could expect to live another 29.9 years. Today the official figure is 32 years. Even the past year has made an enormous difference: only 12 months ago he could officially expect an extra 31.7 years rather than 32.
A DECADE ago an Australian man who had just turned 50 could expect to live another 29.9 years. Today the official figure is 32 years. Even the past year has made an enormous difference: only 12 months ago he could officially expect an extra 31.7 years rather than 32.The extraordinary jump in longevity, detailed in new Bureau of Statistics life tables, is playing havoc with the superannuation system. Australians who get their super in a lump sum are increasingly likely to exhaust it before they die.Michael Sherris, professor of actuarial studies at the University of New South Wales, says financial planners don't understand the risk. "They'll sell people what they call superannuation accounts because they let people draw down what they need, but they typically last 15, maybe 20 years. While 20 years is what the tables say retirees have left, longevity is improving all the time."The life tables show a girl born today can expect to live 84.2 years, and a boy 79.7 years, but if they survive the first few relatively dangerous decades the figures are higher. Professor Sherris says generational changes and improvements in medicine mean a girl born today is quite likely to live to 100, with about half the girls born this year likely to live beyond that."When their super runs out, these people fall back on the pension. For some it's a sudden drop in income. But they won't buy lifetime annuities - so-called longevity insurance - in part because the annual income it gives them is small."Jeremy Cooper, who chaired the government's inquiry into superannuation in 2010, is now an executive at Challenger Limited, one of the few firms selling lifetime support. He says most Australians prefer the "Holden Kingswood" - a product that pays them what they want until it runs out."What they hell do you do when you turn 87?" he said. "You are still spritely and you think you've been frugal, but the money's just not there."Indigenous Australians are more than twice as likely to die in any age as non-indigenous people.