Australia : Baby Boomers, Doing it for Themselves

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A recent report by NATSEM
(National Centre for Social and Economic Modelling) and published by AMP provides
us with interesting information on Australian baby boomers, attitudes towards
ageing, saving for retirement and working later in life. More and more baby
boomers are planning to stay at work or are looking for opportunities to re-enter
the workforce.

The report shows some significant
increases in work force participation rates over the past 10 years, particularly
for older Australians aged 60-64. Boomer women generally have also shown their
willingness to go back to work, with large increases in participation rates
across the whole age group. For instance, the proportion of unmarried women
aged 60-64 who are seeking employment increased by more than 20 percentage points
between 1996 and 2006. While for some this is a scenario driven by economic
necessity, for many others it represents a new wave of opportunity and flexibility.
Many baby boomers continue to pursue the kind of lifestyle they have enjoyed
throughout their lives but know they need income to support it and, for many,
that means extending their working lives.

In the relatively brief
period before many baby boomers must begin to make concrete decisions about
their retirement, most will have a series of choices to make about how they
can maximise their retirement nest eggs. These choices include working longer,
saving more for retirement (by spending less now and managing their debt to
lower levels), earning more on their savings by taking more – but acceptable
– investment risks, taking advantage of Government concessions and structuring
their financial affairs to pay less tax, drawing down on their non-financial
assets (for example, by downsizing their family homes), or by combining any
or all of these options to generally improve their financial situation.

As Baby Boomers –
Doing it for Themselves shows, this generation does appear to be exercising
many of these options: participation rates among Australians aged 45-64 are
increasing, boomers are putting more into their super and mostly paying down
their home loans before they turn 64, and they have a new retirement income
system about to take effect that allows them to draw tax-free income from their
superannuation once they turn 60. But it is those boomers that take full advantage
of the range of options available to them who are likely to be better off. Invariably,
to get this right, people will need to access good financial advice.

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By The Geneva Association
53, rte de Malagnou 1208 Geneva, Switzerland
www.genevaassociation.org
Tel. +41 22 707 66 10
Fax: +41 22 736 75 36

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