Australia: Retirement - a lifestyle choice

It is estimated that by the year 2031 the youngest of the baby boomer generation will have retired, and 22 per cent of Australia’s population will be retirees.¹

According to a survey conducted by ANOP on behalf of the Association of Superannuation Funds of Australia, 41 per cent of Australian workers aged 30 to 69 are looking forward to their retirement, with ten per cent planning to travel around Australia.²

Paul Northey, General Manager Navigator Distribution, agrees with the survey results indicating future retirees are also looking forward to additional free time and less stress during their retirement years.³

"The big question is how to ensure this is what you get when you retire," says Paul. "The answer is that it’s totally up to you. The government pension of $11,448 per annum for a single and $19,110 per annum for a couple will not fund a retirement lifestyle of relaxation and travel – future retirees who want something better need to take their finances into their own hands."

As we move through the first quarter of the new financial year it is a good time to think about the year ahead and making the most of personal finance. One idea is to make a commitment to invest your annual tax refund straight into your superannuation account.

For example, just one annual tax refund of $2,500 invested into a superannuation plan, at age 30 could add $8,000 to your retirement nest egg 35 years later⁴. Enough money for a comfortable holiday, or even an upgrade of your car, in retirement.

Retirement is no longer a short-term arrangement for most people. Previously, the average period in retirement was about five years for men and 12 years for women⁵. Now, average life expectancies have increased with women expecting to live until 86 years and men looking at 81 years⁶.

"It’s important to plan long term when thinking about retirement. Most people will spend at least 20 years of their life retired and making sure your money lasts so you can enjoy the years is very important," said Paul.

Obviously, any regular additional contributions to your superannuation can significantly enhance your retirement income.

To encourage people to save for their own retirement the government offers generous tax concessions for superannuation investors. Investment income is currently taxed at a maximum rate of 15 per cent.

"Before making any major decisions about your superannuation it is important to see a Financial Adviser who can create a financial plan to suit your individual needs.

"It’s all about getting prepared early in life and deciding the best way of investing that suits you – today is as good as any to get started. A Navigator Personal Retirement Plan might be just what you’re looking for to ensure your retirement is both happy and dignified," said Paul.

¹ Australian Bureau of Statistics, Australian Social Trends 2001, Population projections for the 21st century, May 2002, Canberra.
² ANOP Research Services, National Survey of 30-69 population for the Association of Superannuation Funds of
Australia, Based on random sample of 755 Australians aged 30-69 years, August 2001. Refer comments above… 
³ ANOP Research Services, National Survey of 30-69 population for the Association of Superannuation Funds of
Australia, August 2001.
⁴Investment at 4% pa net of fees and before 15% tax on investment earnings. (4% pa used for investment earnings rather than, say, 7% pa and an assumption of 3% pa inflation, so that spending power of end result is comparable to today’s prices.)
⁵ www.lifebydesign.com.au, Is it greener on the other side, Sydney.
⁶ The Association of Superannuation Funds of Australia Limited, An Adequate Retirement Income?, June 2001

-ends-

Paul Northey is available for interview.

For further information, please contact:
Simon Morgan, Group General Manager
Public Affairs
+61 3 9829 8892
+61 0407 966 632

• Note to editors:
• Norwich Union Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company to Norwich Union. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Norwich Union Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
• Aviva is the worlds seventh-largest insurance group and the biggest in the UK. It is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$68.32 billion, and more than A$488 billion of assets under management (as at 1 July 2003). The group has more than 59,000 employees and 25 million customers worldwide.

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