Planning to retire: think ahead

Debt Man column – The West Australian (Business)

1 April, 2011

Bruce Brammall

Debt Man

When I first heard the Uncanny X-Men belt out “Where will we be in 50 years?”, I was 14.

I was the target age group. But I’m sure, given Brian Mannix’s charisma and reputation, he was really aiming it at chicks. The girls loved him. And, thanks to the 80s music revival, they still do. Not bad for a nearly 50-year-old.

While I liked the song, I was years off being old enough to vote, legally buy liquor, stay up past my bedtime or get a gun licence. So why would I care where I was in half a century? Fourteen-year-olds can’t think that far ahead. They shouldn’t have to. The same applies for 20- and 30-year-olds.

But that changes at about 30. Not 50 Years, but maybe five or 10. Careers are taking off, real money is starting to be earned, a “Happy Days” mortgage document starts calling your name like Chachi screaming for Joanie.

But then, creeping up on your some time soon after that … BANG!

Something hits you and you have to ponder the future. It’s usually either the arrival of muppets, or turning 40.

If it’s muppets, then you have to start thinking 20 years ahead. Supporting the evil habits in toys, fads, fashions, school fees, food and clothes. Later on, you’ll need that gun licence to protect your baby girl from boys like your son.

Where will I be in 50 years? Statistics say: “probably dead”. A guy’s life expectancy is about 79. If I’m 40 (sob, the truth), add another 50 and you come to the conclusion that “every day you get out of bed is a bonus”.

(Women are packaged a little better. Their “expiry date” reads 84.)

And that’s cool. Plenty of time to play with the grandkids. Work on the golf game, if you can still lift a club above your shoulder. Not having to worry about hangovers anymore, because you can sleep in. For days. Just remember to wake up occasionally to check your pulse.

Living long has benefits, even if you have to iron a few extra wrinkles.

Very cool … unless you are poor. Being old and poor would (I don’t think I need to ask an adjudicator) suck.

Membership of a nice golf club would be impossible. Dreaming about an annual cruise would be just that – drop by Flight Centre and pick up a brochure, then close your eyes and believe.

The couple age pension is about $26,300. The Westpac/ASFA survey suggests that $51,100 is needed for a “comfortable retirement”. Big gap.

But who wants to live a “comfortable” retirement? Not me. I want to live an “awesome” retirement. Tell me you don’t!

Most Generation Xers (1960-1980) will have received super for most of their working lives. That will part fund the gap between government pension “poverty” and “comfortable”. But still way short of “awesome”.

The old rule regarding super used to be: raise the kids, pay down the mortgage and then shovel into super at 50.

However … you simply can’t do that anymore. A nasty little fart-in-the-elevator was dropped for Gen X. Blame Kevin “The Super Dud” Rudd.

In 2009, K-Rudd halved how much money you could pump into super. That figure had already been halved by Peter Costello. Five years ago, you could get $100,000 a year into super. Currently, you can only get $50,000 a year in. From July 1, 2012, that’s going to be $25,000.

The result? If Australians plan on using superannuation to fund their retirement, they will have to start putting away far earlier.

The old self-denial of ageing was that “50 is the new 40”. With super, the exact reverse is actually a truism: “40 is the new 50”.

If you’re 40, it’s time to start thinking about getting more money into super than the 9 per cent your employer contributes.

Why? Because unlike previous generations, the restrictions on getting money into super are now as tight as an Uncle Scrooge Christmas party.

Where will YOU be in 50 years? The Uncanny X-Men’s question is just as stupid now as it was 25 years ago when they first sang it to teenagers.

No-one can plan that far ahead. But Gen X will have to plan for retirement a hell of a lot earlier than previous generations.

Bruce Brammall is the author of Debt Man Walking ( and a licensed financial adviser. .

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