We’d all like to live longer but can we afford to?
According to the Australian Bureau of Statistics, the longevity of an average Australian man has jumped from 29.9 years a decade ago to 32 years today.
This means that a decade ago an Aussie who had just turned 50 could expect to live another 29.9 years but today he could officially expect an extra 32 years.
But living longer might not necessarily be a good thing. ABS analysis published by Fairfax shows the jump in longevity is wrecking Australia's superannuation system, drying up the savings by the time people hit their sunset years.
According to the report, Australians who get their super in a lump sum are more likely to exhaust it before they die. Even Australians who take it out gradually at recommended rates face the same fate.
The life tables released by ABS on Thursday reveal that 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.
Fairfax quotes Michael Sherris, professor of actuarial studies at the University of NSW, as saying that longevity leads to a sudden drop in income. “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,” Mr Sorris is quoted as saying.
The life tables depict the mortality experience of a hypothetical group of newborn babies throughout their entire lifetime.
It is based on the assumption that this group is subject to the age-specific mortality rates of the reference period.
Typically, this hypothetical group is 100,000 in size.