In
his first speech of 2010, Prime Minister
Kevin Rudd alerted the country to the
huge challenges that lie ahead due to
our ageing population.
The bottom line is that by 2050, there
will only be 2.7 working Australians for
every retired person. This compares to
5 working people for every person over
65 right now, and 7.5 working people for
each retired person 40 years ago.
The clear message is that the ratio of
those still working will be insufficient
to fund the huge numbers of retirees.
On top of this huge imbalance, retired
people will also be living for 10 or 20
years longer, meaning that their living
and medical cost support will have to
continue for 30 or 40 years after retirement!
The Prime Minister said that an increase
in productivity of 2 per cent per annum
would be needed to offset the huge impact
of the ageing population. This is true,
but it’s a bit like saying that
we are facing increasing drought in the
future, and that what is needed to relieve
this is more rain.
The problem is very serious, and it is
irresponsible to simply hope that the
government will find a way to reduce the
impact. We have to accept the situation
for what it is, and do something about
it to shield ourselves from the impact.
McCarthy Group recommends that clients
build up a portfolio of 3 or 4 investment
properties in the years leading up to
retirement. One property is then ‘consumed’
each decade, providing the income and
lifestyle possibilities that would not
be available otherwise.
What is clear is that there is nothing
that can be done to stop the population
shift that is coming. The fuse is lit,
and time bomb is ticking. However, by
seeing the threat in advance, you have
the time to do something to protect yourself
and your family from the full force of
its impact. Our advice is to you is to
develop a portfolio of four investment
properties – before the bomb goes
off.
If you would like to learn more and discuss
how McCarthy Group can assist you, click
here.
(Source: Article by Dan
Harrison, Sydney Morning Herald, 19 January
2010)
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