To people complaining at the thought of the aged pension age being increased to 70, unfortunately reality dictates that there is simply not enough scarce resources to continue paying aged pensions from 67. This the rumored proposal is to raise this to 70 by 2023. The following factors should be taken into consideration: 1) When the aged pension was first introduced with an eligibility age of 65, life expectancy for males was below 65. Most people would never live to qualify for the pension and indeed worked until they died or supported themselves in retirement if they decided to retire early. The burden on the taxpayer was therefore minimal. 2) Life expectancy for men is now 78 and for women above 80. Life expectancy is continuing to increase well into the 80s as we are more prosperous, better fed and have access to better medicine and medical technology continues to advance. This means that the pension would need to sustain an aging population for 20-30 years post retirement. It is not sustainable in the long run. The opportunity cost of people living longer and healthier is that we should also be productive and self reliant for longer. Also worth taking into account is that by 2023, the vast majority of Australians retirement will be self funded through superannuation rather than the aged pension. Reality is what it is, and wishing wont make it change. We should be grateful were living decades longer than previous generations and the payoff is that were productive and self reliant for another couple of years in order for the aged pension to remain sustainable.
Posted on: Sun, 13 Apr 2014 08:43:18 +0000