POWERED BY MOMENTUM MEDIA
White collars beating average life expectancy
Average life expectancy is not the only factor to consider when designing policy around superannuation, as many are likely to live beyond the average, Mercer research said.
Mercer studied the mortality rates of public sector pensioners, which showed 50 per cent of retiring white collar male workers are likely to live to 88 years, while 35 per cent could live to 91; 20 per cent could live to 94 and 5 per cent could live to 99.
This is well above the average life expectancy of 84.1 years for men.
For females, 50 per cent are likely to live to 91 years, 35 per cent until 93, and 20 per cent until 96, while another 5 per cent will live beyond 100.
The average life expectancy for females is 87.
"We know half of all public workers — which can fairly be extrapolated to apply to Australia's nearly eight million white collar workers — will live well beyond the average and we need to begin planning more accurately for financial security at a personal and macro level," Mercer managing director and Pacific market leader David Anderson said.
He said this will have consequences for individuals, businesses, and policy makers in relation to superannuation savings, investment portfolio construction, healthcare, aged care, finances, retirement, and the need for personal financial advice.
Partner at Mercer Richard Boyfield said it is risky for policy makers, super funds and individuals to use life expectancy as the bar for retirement planning.
He said private health insurance and aged care services could be important factors to consider when formulating financial plans for retirees.
The cost of a residential service can be $236 a day (around $86,000 a year), he said.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
