We are told people who retire today could live until they are 90.
Today if a person 60 or over becomes unemployed their chances of getting another job are slight.
The current forecast inflation rate is 2.5 per cent, compounded for 30 years that equates to 209 per cent, or in simple terms, to maintain the spending power of your retirement income, a retired person will need to draw twice as much cash from their superannuation fund in 30 years time as they are today. 3 per cent compounded for 30 years is 242 per cent. 3.5 per cent compounded for 30 years is 280 per cent.
What the real inflation rate will be over the next 30 years is more guess work than science. To add to the uncertainty of long range financial forecasts, the people who are producing these forecasts are the same people who failed for forecast the GFC of 2008, and the negative impact, it had on superannuation asset values and forecast income streams.
It is also possible that retired people in their 80s might need some form of assisted living, how much will that cost in 15 to 20 years’ time? I don’t know but my guess is more than it does today.
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Bill Shorten gave us his vision of the future, telling all the things he was going to spend money on, but only nominated two sources from which the money would come from. The first was to get multi-national companies to pay the full rate of tax on profits generated in Australia, as Joe Hockey had announced this in the budget the previous night, hardly an original idea.
The obvious question that so far nobody has asked Bill Shorten is, why did the former Rudd/Gillard/Rudd government fail to go after multi-nationals in the same way the current Liberal government is doing? As Joe Hockey has already committee to spend in his budget, the extra money raised from multi-nationals, Bill Shorten cannot spend the same money again to pay for his promises?
The only new tax Bill Shorten announced to pay for all his promises was to raid superannuation savings, in doing so, he was telling all Australians over the age of 50 not to vote for Bill Shorten and the ALP at the next election. Australian voters traditionally have short memories, if you want an income from your superannuation fund in retirement, do not forget Bill Shorten’s budget reply speech of 2015.
Do you agree with Kevin? What did you think of Bill Shorten’s speech?