Money can’t buy health

But it can fund your longer retirement

One of the world’s oldest medical journals – the British Medical Journal or BMJ – recently published statistics that reveal, when it comes to longer lives, Australians have won the lottery. The study, Life expectancy and geographic variation in mortality, reviewed data on life expectancy across six high-income English-speaking countries between 1990 and 2018. The countries included in the research were Australia, Canada, Ireland, New Zealand, United Kingdom and the United States.

The conclusions were that Australia is the ‘clear best performer’ in life expectancy at birth, leading its peer countries by 1.26–3.95 years for women and by 0.97–4.88 years for men in 2018. It also experienced the lowest levels of inequality, with Ireland, New Zealand and the US experiencing the highest levels. The BMJ reached the conclusion that 

Australia serves as a potential model for lower-performing countries to follow, to reduce premature mortality and inequalities in life expectancy. The worst performing nation was the US.

What is Australia doing right?

A lot, according to the research. In particular, our high intake of people born in other countries leads to better levels of life expectancy. Australia was also reported to have managed the covid pandemic well, to have lower smoking rates, effective public health campaigns and a strong healthcare system.

The sea change is alive and well

Other recent data from the Australian Bureau of Statistics (ABS) showed Darwin to be our youngest capital city and the only one where males outnumbered females. People aged 55 years and over made up a smaller proportion of the population in capital cities (26%) than in the rest of Australia (34%).

The areas with the oldest median ages tended to be retirement destinations on the coast including:

• Tea Gardens – Hawks Nest (66.2 years) in New South Wales
• Bribie Island (63.6 years) and Cooloola (62.4) in Queensland and
• Point Lonsdale – Queenscliff (62.2 years) in Victoria

What does this mean for you?

Media coverage of longer lifespans is fairly frequent, which means that it can sound a little ‘same old’ and easily ignorable. But, assuming your extra years will be relatively healthy, it’s actually great news. Where increased longevity can seem challenging, is when you are juggling the numbers, trying to anticipate how much you will need to fund yourself over a robust lifespan. There are three major things to think about here. By doing so, you are less likely to be caught out financially.

1. Try not to retire too early

This might be easier said than done, as approximately 25 % of Australians will retire due to ill health, care duties or retrenchment. But if we think of retirement as a marathon, then you don’t stop for your first drink of water after a few steps, do you? You pace yourself and push on that little bit longer. If you enjoy what you do, retiring at a predictable age (i.e. the previous Age Pension age of 65, or the new one of 67) might mean you lose a sense of self and contribution earlier than necessary and have less money to fund the decades ahead. Going part-time can make a lot of sense. Taking on short work stints or projects is also useful. Expanded Work Bonus allowances are helping many Australians to do just this – you can learn how this works here.

2. Don’t assume your spending will be consistent

Assuming that you will spend the same amount at the same rate every year in retirement is a mistake. It makes for easier retirement calculations, but life isn’t always that predictable. Instead most advisers have discerned a pattern of spending which is higher in the early active years, slowing somewhat in mid retirement, and lower again (with the exception of unexpected medical needs) in the later years, age 80 and beyond. As we reported last week, from 1 July 2025, there is an expectation that all Australians will need to contribute a proportionate amount to aged care costs, whether in the family home, or a residential facility. This possible additional expense will now also need to be taken into account.

3. Keep a close eye on your projections

The greatest favour any retiree can do themselves is to be on top of how much they are spending and how their current rate of spending will affect their savings. This does not mean to be fearful about money running out. We have noted previously that you will always (subject to age and residency) be entitled to an Age Pension which is a safety net to ensure no one ‘runs out’. Most Australian retirees live on a combination of pension entitlements, topped up by super and other savings or investments. Keeping tabs on how long you can spend at your current rate means you can then make changes (if needed) to ensure you live within your income. Sharon Sheehan, adviser at Retirement Essentials, suggests checking in for a retirement forecast every five years or so will help set your mind at rest. At these intervals you can also compare scenarios to ensure that you are using all possible options to maximise your income.

You can read more about how longevity works in this recent article. 

How can Retirement Essentials help?

The Longevity calculator helps you understand your likelihood of being alive at any future selected date. It also calculates the likelihood of a partner still being alive. Rather than being a ghoulish thought, this is practical information which will help you to plan with greatly enhanced accuracy. To access the calculator you will need to be logged in as a member.

Retirement Forecaster

The guided Retirement Forecaster consultation allows a qualified adviser to share with you competing scenarios based upon your spending and savings. This means you can check how ‘future ready’ your retirement income will be.

Do you ever think about your own probable life span?

Would it make a difference to see how long it is likely you will be around?

Is there something you would do differently, for instance?