I had a dream the other night – it was the scene from Life of Brian where the convicts are lined up before an officious jailer, who is ticking-off their fate on a clipboard: “Crucifixion? Line on the left – one cross each!”
But in my dream-version, I was confronted with a bean-counting accountant in front of a supermarket check-out till, behind which the line branched away into two corridors marked “Live” or “Die”.
I saw myself reaching for my wallet, asking “How much to live?”
In a weird kind of way, this is a very relevant, and thoroughly modern, estate planning question.
Back in the day, men retired at age 65 and women retired at 60. They received the old-age pension, and generally died in their 70’s.
Now, nobody can afford to retire at any age, because the pension barely covers the cost of the petrol needed to drive to the Department to collect the cheque in the first place, and yet we’re all living to 100! The Queen must be going broke with all the telegrams she has to send nowadays to people reaching their hundredth birthday.
Okay, there’s a bit of poetic licence in the last paragraph. But there’s also some truth.
As a nation, we’re living longer than ever. According to the Australian Institute of Health and Welfare, 80 to 85 is the current average life expectancy for Australians, but this is based on historical life tables, and only looks backwards at existing populations. The trend of future medical advances has led the High Court to accept that prospective life tables are a better model for predicting future life expectancies, and these tables not only predict a significantly higher life expectancy, but that they will keep increasing year by year with further medical advances.
So when you think about planning for your retirement, you’d better make allowance for the possibility that you might be out of work for a very long time.
Can you afford that? Have you planned for that?
The old song lyrics were: “What are you doing for the rest of your life?” It applies to retirement as much as romance. Retirement is not a permanent vacation. After awhile, there’s nothing to rest-up & recuperate from, and boredom sets in. Unless you’re particularly wealthy, you won’t be able to live “vacation style” in retirement for long.
What are you going to do? Do you want to sit at home, watching daytime television? Do you want to just play golf? Do you want to travel? All of these things are going to directly affect how much retirement income you will need
Most people think they will need at least $500,000 by the time they retire to live comfortably afterward, however very few people will have actually saved that amount prior to age 65. But don’t give up. Most industries and occupations no longer require compulsory retirement at age 65. You may be able to go part-time, but continue to contribute to your super.
Death & taxes, illness & share-market corrections may be unavoidable … but they don’t have to ruin your family or your business. Make the effort to protect the people you really care about. Call Genders & Partners to create an integrated estate plan. And do it NOW … before it is too late.
Rod Genders is a senior Australian lawyer specialising in accident compensation and estate planning in Adelaide. His boutique specialist law firm is one of the oldest and most respected in Australia – visit it at www.genders.com.au . Rod is also a prolific author and speaker. Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Asset Protection and Retirement Planning may be found at www.genders.com.au/adelaide-lawyer-blog.
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