Category: Planning ahead

prepare your will, power of attorney, enduring guardianship

Can you predict a happy retirement?

Have you ever wondered whether you will be happier in retirement than when you are still working?

A long-term research study has considered seven aspects of personal life which may determine whether you will feel satisfied in your retirement years.  The seven aspects of personal life are:  standard of living, health, achieving in life, personal relationships, safety, community connectedness, and future security. 

Known as the Personal Wellbeing Index (PWI), the PWI determines the average level of individual satisfaction compared to the National Wellbeing Index (NWI). 

The research was conducted to create the Australian Unity Wellbeing Index (AUWI) as a barometer of Australians’ subjective wellbeing (SWB). Thirty-five cross-sectional surveys of 50,060 Australians were conducted over a period of 17 years, from March 2002 to April 2018. The same core index questions, forming the PWI and NWI were asked within each survey.

Subjective Wellbeing (SWB) in ageing and retirement is a topic of growing relevance, with more than 1 in 7 Australians aged 65 years or above, and more people in this age group choosing to remain in the workforce for longer periods.

As individuals age, it is apparent that SWB becomes increasingly influential on health and longevity.  Identifying factors that predict wellbeing in retirement may offer important insights that inform health policy advances to promote wellbeing in older Australians.

Key findings

Differences in wellbeing between retirees and non-retirees:

  • Retirees as an aggregate group (2003-2018) reported scores above the Australian normative range on Global Life Satisfaction (GLS), overall Personal Wellbeing Index (PWI), and on the individual domains of standard of living, achieving in life, personal relationships and future security.
  • Compared to non-retirees, participants who were retired reported higher scores on the individual domains of standard of living, achieving in life, personal relationships, community connectedness and future security. However, retirees reported lower scores on the domain of health compared to non-retirees.

SWB was measured using two indexes. One is the single-item, Global Life Satisfaction (GLS), which askes “How satisfied are you with your life as a whole?

The second is the Personal Wellbeing Index (PWI), which reflects the average level of satisfaction across seven life domains – standard of living, health, achieving in life, relationships, safety, community connectedness, and future security.

Differences in SWB among retirees over time:

Group comparisons between retirees in 2003 and 2018 identified lower SWB among retirees in 2018 on overall PWI scores, and the domains of standard of living, health, achieving in life and personal relationships. This suggests that SWB has decreased somewhat over time among retirees in Australia.

Group comparisons across each survey timepoint also largely supported these findings.

  • GLS, PWI, and the domains of standard of living, personal health, achieving in life, personal relationships and future security decreased over time but were still within the normative range for GLS, overall PWI, standard of living, achieving in life and personal relationships.

For health, average scores fell from within the normative range to below the normative range:

  • Decreasing scores on GLS and personal relationships were similar
    between retirees and non-retirees.

  • Average scores on PWI, standard of living, health, achieving in life and future security were found to decrease at a somewhat faster rate among retirees compared to non-retirees.

  • Two domains showed increasing SWB over time: personal safety and community
    connectedness; however, these changes were similar for both retirees and non-retirees.

Predictors of wellbeing over time by retirement status:

Notably, the transition into retirement period was characterised by the highest levels of SWB, self-esteem, optimism, coping and resilience, as well as the lowest levels of depression.

The predictors of SWB differed for the three retirement groups. Specifically, overall PWI in 2018 was predicted by the following factors (assessed in 2013):
For those who transitioned into retirement, higher levels of satisfaction with achieving in life, personal relationships and personal safety.

  • For those who remained non-retired, higher levels of satisfaction with personal health and community connectedness.
  • For those who remained retired, higher levels of satisfaction with personal health, personal safety and community connectedness.
  • Additionally, for those who remained retired, higher levels of optimism in 2013 were predictive of smaller decreases in PWI scores.

Notably, the effects sizes for these relationships were small, which suggests that there are likely to be a range of factors that contribute to SWB among Australian adults around the period of retirement.

https://nla.gov.au/nla.obj-1618700446/view


Retirees face increased cost of living driven by global factors, but superannuation is buffering the impact, says ASFA

As skyrocketing inflation pressurises household budgets worldwide, the Association of Superannuation Funds of Australia (ASFA) says Australian retirees stand in stark contrast to their overseas counterparts who do not have the safety net provided by compulsory superannuation.

ASFA Deputy CEO, Glen McCrea says despite the current pressure on household budgets, Australian retirees are in a stronger retirement position than their global peers because of Australia’s robust superannuation system and retirement pillar settings.

“In contrast, the age pension remains affordable for the government in Australia where, in aggregate, retirees on average have larger private retirement savings balances than in most countries in the world. This helps cover costs during tougher times, providing a brighter outlook for Australian retirees than is the case for their international counterparts,” said Mr McCrea.

While the major categories of expenditure including food, transport and energy have all increased over the past quarter, analysis of those increases reveals that the causes lie mainly outside Australia. 

The ASFA Retirement Standard September Quarter 2022 figures have risen in lockstep with quarterly inflation. Couples aged around 65 living a comfortable retirement now need to spend $68,014 per year and singles $48,266, both up by 1.9 per cent on the previous quarter.  The ASFA Comfortable budget assumes one major trip overseas every seven years.

Over the year to September 2022, the amount needed for a single person to fund a comfortable retirement has risen by 6.7 per cent and for a couple by 6.6 per cent, slightly lower than the current CPI of 7.3 per cent.

Strong price rises were recorded across all food and non-food grocery products in the September quarter. These increases reflected a range of price pressures including supply chain disruptions, weather-related events, such as flooding, and increased transport and input costs.

In the 12 months to the September quarter fruit and vegetables prices rose 16.2% and dairy products increased 12.1%. Dairy and related products rose 6.8% due to higher milk prices.

Over the year to the September quarter, imported inflation saw oils and fats up 19.3%, coffee up 10.7% and gas 16.6% and automotive fuel 18.0%. These prices are set to remain high while geopolitical concerns persist.

Increased demand, high fuel prices and capacity constraints saw domestic travel and accommodation up 10.8% over the year and international travel and accommodation up 25.3%.

Meals out and take away foods rose 2.9% due to rising input costs and ongoing supply and labour shortages. Alcohol rose 1.4% due to the increase in the bi-annual excise tax for alcohol on 1 August.

Details for the various updated budgets follow.

Table 1: Budgets for various households and living standards for those aged around 65 (September quarter 2022, national)

Household typeSingle ModestCouple ModestSingle ComfortableCouple Comfortable
Housing – ongoing only$109.24$122.66$128.37$133.94
Energy$35.05$47.08$44.41$55.07
Food$104.04$192.89$134.52$233.80
Clothing$20.86$39.64$27.86$51.88
Household goods and services$37.12$43.51$82.45$101.52
Health$53.33$103.11$109.02$204.32
Transport$103.93$110.70$169.82$183.93
Leisure$104.30$163.73$205.69$309.20
Communications$17.99$20.27$22.50$29.29
Total per week$585.86$843.57$924.64$1,302.95
Total per year$30,582$44,034$48,266$68,014

Table 2: Budgets for various households and living standards for those aged around 85 (September quarter 2022, national)

Household typeSingle ModestCouple ModestSingle ComfortableCouple Comfortable
Housing – ongoing only$109.24$122.66$128.37$133.94
Energy$35.05$47.08$44.41$55.07
Food$104.04$192.89$134.52$233.80
Clothing$20.86$39.64$27.86$51.88
Household goods and services$54.05$77.78$160.70$192.51
Health$93.02$129.74$153.58$241.95
Transport$41.68$52.09$46.88$57.30
Leisure$67.46$96.70$140.39$196.53
Communications$17.99$20.27$22.50$29.29
Total per week$543.65$778.84$859.21$1,192.28
Total per year$28,379$40,656$44,851$62,237
The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. All calculations are weekly, unless otherwise stated. Annual figure is 52.2 times the weekly figure.

More information

Costs and summary figures can be accessed via the ASFA website, https://www.superannuation.asn.au/media/media-releases/2022/media-release-17-november-2022

Law Council calls for more action on elder abuse

The Law Council of Australia has continued to call for measures that will better protect older Australians.

“Elder abuse is insidious and more prevalent than I think any of us would like to believe,” Law Council of Australia President, Mr Tass Liveris said.

“Incidents of abuse may be physical, social, financial, psychological or sexual and can include mistreatment and neglect.

“What makes it most devastating is that the perpetrator is often someone the older person trusts and relies on, such as a family member, friend or carer.

“We must stamp out elder abuse and protect vulnerable members of our community.”

The Law Council is calling for:
• Appropriate, sustained and increased funding for specialist legal assistance and aged care advocacy services, government agencies, and relevant State and Territory tribunals that work towards reducing elder abuse.
• Implementation of outstanding priorities identified in the Australian Law Reform Commission and Royal Commission into Aged Care Quality and Safety (Royal Commission) reports and the National Plan to Respond to the Abuse of Older Persons 2019-2023, including:
• developing a new Aged Care Act which is consistent with the recommendations of the Royal Commission report by 1 July 2023; and
• ensuring that those in residential aged care facilities have legal redress to protect them from abuse, whether perpetrated by care providers (including in the use of restrictive practices) or fellow residents.

At the end of last year, the Law Council of Australia welcomed the decision by Commonwealth, State and Territory Attorneys-General to prioritise enduring power of attorney (EPOA) law reform to reduce the risk of older Australians being subject to financial abuse and looks forward to this work coming to fruition.

EPOA arrangements are intended to ensure a person’s interests are protected when they lose capacity to make decisions for themselves. However, in the absence of adequate legal safeguards, financial elder abuse by appointed decision-makers may be facilitated by such arrangements.

Law Council of Australia, 15/06/2022, https://www.lawcouncil.asn.au/media/media-releases/australia-must-address-elder-abuse

Let’s talk about women and retirement

Why is retirement different for women? Women retire with about 60% of the superannuation funds that men have. They live 5 years longer and they are far more reliant on the aged pension. On the plus side – women are more likely to retain their friendship networks, more likely to be the principal carer for their partner, their parents and their grandchildren, as well being more likely to volunteer to help others.
Listen to my wide-ranging discussion with community radio 2RDJ broadcaster, Neil Lithgow about women and retirement. Listen here:

FIRST NATIONAL STUDY FINDS MORE ELDER ABUSE

In the year prior to the first national survey conducted into elder abuse, one in six older Australians reported they had experienced abuse most often committed by family members.

The National Elder Abuse Prevalence Study (NEAPS) survey, carried out between February and May 2020, showed that the most common subtype was psychological abuse (12%), followed by neglect (3%), financial abuse (2%), physical abuse (2%) and sexual abuse (1%). Some of the 7,000 participants aged over 65 years reported several types of abuse occurring, usually psychological abuse and neglect.

Types of elder abuse

Nearly one in five elder abuse perpetrators are children (18%), or their partners or grandchildren and about one in 10 elder abuse perpetrators are intimate partners. Children (most often, sons) are most likely to perpetrate financial abuse as well as friends and service providers.

Children are also the largest group of perpetrators of psychological and physical abuse while friends, acquaintances and spouses were most likely to perpetrate sexual abuse.
Children and intimate partners are both significant perpetrator groups (24-25% for each) of neglect. Professional carers (14%) and service providers (13%) are bigger perpetrator groups for neglect than for other abuse subtypes.

Psychological abuse is not always recognized by either victims or perpetrators. It includes insulting, belittling or threatening behaviour towards a person. Family and friends are the best protection for a person experiencing abuse rather than the person who is unlikely to directly confront the perpetrator.

Factors that increase risk of abuse

While women were slightly more likely to be the subject of abuse than men, other factors increased the risk of experiencing abuse, namely, being poorer, being single, separated or divorced and living in rented housing or owning a house with a debt against it. Having poor physical or psychological health also increased the risk of experiencing abuse.

The study did not include people living in aged care or suffering cognitive decline which could increase the identified prevalence of elder abuse in the community.
The federal government has announced additional funding to build on the National Plan to Respond to the Abuse of Older People. This announcement follows on from recommendations made by the Aged Care Quality and Safety Commission to increase funding to home care packages and create new training places for aged care staff.

AIFS, National Elder Abuse Prevalence Study, https://aifs.gov.au/publications/national-elder-abuse-prevalence-study

Australia’s health by socio-economic status

However you describe it, being poor, disadvantaged, or living in a low socioeconomic area is more likely to make you more susceptible to preventable chronic diseases such as heart disease, arthritis and diabetes.

Australia’s Health Tracker by Socioeconomic Status 2021 reports on the health status of Australians based on their socioeconomic standard which the study has found has a major impact on people’s health. Families and individuals with limited resources not only have more chronic disease, they are at greater risk of dying prematurely as a result of chronic health conditions. People living with mental ill-health are less likely to participate in employment, which in itself, is associated with an improvement in general mental health levels.

The ten million people living in the 40% of communities with lower and lowest socioeconomic status have much higher rates of preventable cardiovascular diseases, cancer, diabetes or chronic respiratory diseases than others in the population. These communities also have the highest rates of suicide throughout the nation.

Risk factors that are likely to contribute to this higher rate of illness and premature death include:
• Physical inactivity
• Lifetime alcohol consumption
• Daily tobacco use
• Unemployment as a result of mental health issues.

These health disparities within the Australian population are persistent despite considerable policy reform and efforts to improve services in recent decades. The targets for a healthier Australia were developed by the Australian Health Policy Collaboration, a national network of leading health experts and organisations. The Collaboration has worked with the support of the Mitchell Institute, Victoria University since 2014 to influence public and policy awareness and action to reduce high rates of preventable chronic disease in the Australian population.

The report sets health targets for medical conditions such as:
• Obesity – Obesity is a risk factor for cardiovascular disease, high blood pressure, type 2 diabetes, asthma, back pain and some cancers.
• High cholesterol – High levels of low-density lipoprotein cholesterol are a risk factor for heart disease. National data from 2011-12 is the most recent available data and indicated that close to one-third of all socioeconomic groups were estimated to have high cholesterol levels.
• High blood pressure – Rates of reported high blood pressure are relatively consistent across socioeconomic groups. High blood pressure is often caused by poor diet, physical inactivity, obesity and excessive alcohol consumption. It is a risk factor for chronic conditions including stroke, heart diseases, and chronic kidney disease
• Diabetes – Hospitalisations and deaths related to diabetes are, respectively, 2 and 2.3 times as high in the lowest socioeconomic communities compared to the highest.

Australia’s Health Tracker by Socioeconomic Status 2021 report, The Mitchell Institute at Victoria University. Australia’s Health Tracker by Socioeconomic Status 2021 report

How has Covid-19 impacted Australian households?

It’s been over a year since Covid-19 became a part of every Australian household’s life. On a personal level, we have become accustomed to wearing a mask, sanitising our hands and remaining socially distant in public spaces.

But on a national level, the Australian Bureau of Statistics has conducted regular surveys to ascertain the changes that have occurred across the country. Some of the key findings that emerge from the May 2021 survey which was carried out when no part of the country was in lockdown are:
• Women (62%) were more likely than men (35%) to spend five or more hours in May on unpaid indoor housework.
• One in four (27%) people have prioritised their mental health since March 2020.
• One in four (27%) who wanted, or intended, to travel in winter, were replacing plans affected by COVID-19.

Managing their physical and mental health was a key area of concern:

• Since March 2020, 89% of people have participated in one or more activities to manage their physical health.
• The most common activities for managing physical health were walking regularly for transport, exercise, recreation or sport (60%), watching or changing diet (48%), regularly doing physical activity (excluding walking) (47%) and getting enough sleep (39%).
• Almost one third (32%) of people have placed more, or much more, priority on their physical health since March 2020.

Almost half of the respondents surveyed reported their health as excellent or very good and fewer people reported having poor or fair health. Most people rated their health as being about the same as before the pandemic but for those who were in poor health, they tended to report their health as worsening over time. Most respondents reported maintaining about the same level of mental health as before the pandemic using such strategies as organising their home, life or other things (36%), doing more of the things they enjoy (33%) and increasing their level of exercise or physical activity (31%).

Getting vaccinated

By May 2021, fewer people (68%) reported that they intended to be vaccinated when it became available, compared to December 2020 when 73% said they intended to be vaccinated. Those men aged over 70 years were far more likely to intend to be vaccinated than younger people. A steady 13% of respondents indicated that they did not intend to be vaccinated because of their concerns of side-effects and effectiveness.

Unpaid work

As might be expected, women were almost twice as likely as men to have spent 20 or more hours a week on unpaid caring and supervision of children (28% compared to 15%), as well as 5 hours per week on housework. In addition, almost two in three (64%) women spent 5 or more hours on unpaid cooking and baking, compared with almost two in five (37%) men.

Employed people were more likely to spend unpaid time supervising and caring for children than unemployed people.

Household finances

What effect did the pandemic have on household finances? Comparing the figures before the pandemic to May 2021, the majority (60%) reported their household finances remained the same with 22% reporting their finances had deteriorated but 17% reporting they had improved. However 20% reported that they had taken action to support the household because there had been a shortage of money by drawing on savings, increasing their credit card balance or borrowing money.

One of the more significant aspects of the pandemic was on the capacity of vulnerable people to pay bills as they arose:

• One in 13 (8%) Australians reported their household was unable to pay one or more selected bills on time over the last three months due to a shortage of money.
• People with disability (12%) were more likely than people with no disability (7%) to report their household was unable to pay one or more selected bills on time over the last three months due to a shortage of money.
• The majority (91%) of Australians reported their household expects to be able to pay bills received in the next three months.

ABS, Household Impacts of COVID-19 Survey, May 2021, https://www.abs.gov.au/statistics/people/people-and-communities/household-impacts-covid-19-survey/latest-release

COVID-19 impacts during 2020

Grandparents reported feeling disconnected and isolated from their children and grandchildren during the COVID restrictions imposed during 2020.

In two surveys conducted by the Australian Institute of Family Studies during each half of 2020, three out of 10 grandparents said that prior to the COVID-19 outbreak, they provided childcare to their grandchildren at least weekly. Of those grandparents, 14% of respondents with grandchildren aged under 13 years provided child care daily or several times a week, another 16% provided child care about once a week and around half provided care at least once per month.

Grandparent care and care for grandparents were most impacted during the pandemic, with respondents reporting that for many families, grandparents did not provide the usual care to their grandchildren for some months during the pandemic. Care for grandchildren ceased because of restrictions imposed on visiting family members or because parents increased their work from home.

Many grandparents reported feeling disconnected from their family and missing out on family traditions during the lockdown period. While some grandparents were able to access technological solutions to connect with family, others found the technology frustrating.

There were 7,306 respondents in the first survey of whom 6,435 completed all survey questions. In the second survey, 4,866 participants responded, of which 3,627 completed all survey questions. Over 80% were female respondents, tertiary-educated, ranging in age from over 18 years to 60+ years who lived either in a capital city, a major regional city or regional area.

Impacts on caring for others

In addition to generalised fears as to how the virus might affect the physical and mental health of family members, the pandemic forced changes to the availability of in-home support services. Caring hours for family members increased significantly over the year for 70% of respondents, nearly half of the respondents saying they spent over 30 hours per week in relation to child care and home schooling, while about 20% of respondents reported spending over 60 hours per week on caring activities which included caring for a parent or a partner.

Respondents also referred to giving assistance to non-household members which could include friends or work colleagues. This could include giving emotional assistance, or providing help with shopping, transport, house or garden maintenance and sometimes financial help.

Community volunteering was also impacted by the pandemic during 2020 in that in many volunteer-reliant charities, older volunteers were restricted in the types of volunteer work they could do and, at the same time, demand for services from charities increased due to the impact of COVID on employment and income.

Community volunteers were more likely to be older people. Survey results showed that over a quarter (27%) of respondents or their partners had engaged in some form of voluntary work in the past year, including half of those aged 70-79, 36% of those living alone, and 40% of those living in remote areas.

Of those who volunteered at some time during 2020, almost two in three (62%) continued to volunteer throughout the year, 20% volunteered before COVID but had yet to return to volunteering, 6% started volunteering after COVID, 4% stopped volunteering during COVID but have returned to volunteering, and 4% volunteered only during COVID. (The remaining 5% is other combinations.)

Report no. 1: Connection to family, friends and community, Families in Australia Survey, May 2021, https://aifs.gov.au/publications/connection-family-friends-community

Retirement village exit rules changed

New legislation means that NSW retirement village contracts will now include a timeframe that ensures timely payments for a former resident’s exit entitlements.

These changes apply only to registered interest holders with a long-term registered lease that gives them at least 50% of any capital gain.

They do not apply to:
• registered interest holders who own a lot in a strata or community scheme village or own shares in a company title or trust village that gives them their resident right; or
• unregistered interest holders.

New retirement village laws started in January 2021. The changes reflect complaints made about how exit entitlements were previously managed and provide a timeframe for former residents to receive their exit entitlements. Summarised, the changes:
• enable residents to receive exit entitlement money before their unit sells (if the sale has been ‘unreasonably delayed’);
• provide an option for residents to fund their move into aged care by accessing part of their estimated exit entitlement money;
• ensure residents no longer have to pay ongoing charges for general services for more than 42 days after they leave the retirement village (commences on 1 July 2021 onwards).

New legislation has been introduced which affects existing and all new retirement village contracts. Previously registered interest holders had to wait until a new resident either moved into or leased their old unit before they were able to receive their share of the sale proceeds (the “exit entitlements”). This could mean that if the village operator delayed the sale of a unit after the resident left, the former might not receive their exit entitlements for anywhere between two and five years.

Under the new legislation, a registered interest holder can apply to the Secretary of the Department of Finance, Services and Innovation for an exit entitlement order directing the village operator to pay the exit entitlements to the former resident even though the unit has not sold. The order can require payment after six months for Sydney metropolitan, Wollongong and Blue Mountains residences and within one year anywhere else in NSW. This order will only be made if the village operator has “unreasonably delayed” the sale considering the time taken to refurbish the unit and whether the operator as selling agent has performed all their duties within reasonable time.

Such an application can only be made by a former resident but not their estate. If the order is made, the exit entitlement must be paid with 30 days of the order.

If the registered interest holder moves out of the retirement village into a residential aged care facility and has not received their exit entitlement, the resident may ask that the operator make one or more daily accommodation payments to the facility on behalf of the resident within 28 days of the resident’s request. As more than 60% of residents move directly into aged care, their move can be delayed if they do not have access to funds to pay the daily accommodation payments to the facility and the unit does not sell quickly. These amendments are intended to make the transfer easier for residents and family members.

For more detail, see Fair Trading website, https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/changes-to-retirement-village-laws