How Australia's Aging Population Will Affect Us All

Aging Fast

Australia's aging population makes superannuation policy reform an urgent issue, with figures showing the number of Australians aged 65 and over is projected to more than double between now and 2055. This means a rise from 3.1 million people, or 15 per cent of the population today, to 7 million, or 23 per cent of the population, by 2055.

Today, there are 4.5 people working for every person over 65; this will fall to 2.7 people – putting more pressure on the youth of today to support older Australians in retirement.

Over the same period, life expectancy will increase to be 95.1 years for men and 96.6 for women.

This means today's 30 year olds have to accumulate enough savings to last them for 30 years after they retire, meaning government policy needs to be focused on getting get as many as people off the pension and into self-sufficiency as soon as possible.

The government is not going to have the tax base to support a pension system for 23 per cent of the population, and even if it could, an economy where 23 per cent of the population can not fully participate due to low income would stagnate.

How prepared are you to fund your retirement for 20+ years?

The $1 million market is continuing to rise in prominence.

As dwelling values broadly rise, the proportion of lower priced homes selling is falling, the number of homes selling with a price tag of at least $1 million has boomed over recent years.

Over the 12 months to June 2016, 14.0% of all house sales and 7.3% of all unit sales were at a price of at least $1 million. To put these figures into perspective, just five years ago 7.5% of all house sales and 4.0% of all unit sales were within this price point.

The combined capital cities have predictably seen a much higher proportion of sales of at least $1 million over the past year. Across all house sales, more than 1 in 5 sales (20.9%) were for at least $1 million compared to 8.9% of all unit sales.

Consumer confidence highest since Nov 2013

Consumer confidence climbed to its highest point for nearly three years last week, with news of falling unemployment cited as a likely cause.

The ANZ-Roy Morgan index of consumer confidence rose last week to its highest level since November 2013.

ANZ senior economist Jo Masters said the jump was likely influenced by buoyant share and housing markets, and news that unemployment had fallen in July.

Have a great weekend and catch you next week!

Troy Gunasekera