Here’s the real facts, not the disguised unknowns about retirement in Australia.
This is the real truth behind retiring in Australia.
Don’t let the facts scare you, because there is a group of mum-and-pop’s out there who decided and acted BEYOND the statistics you are about to read. There is a group of ‘9 to 5’ workers, who decided to act greater than their past and who, by following the path laid down by others who escaped the rat race, actually made it.
The statistics for Australian Workers are as follows:
1. 81% of retirees end up on the aged care pension- Now it wasn’t long ago the pension was $396 for a single and $512 for a couple. In my eyes…..that’s poverty here in Australia.
2. 95% of Australian’s never achieve financial independence- This is all down to the fact that they never planned their future, acknowledged that they needed to do something, and were blinkered in their approach. No matter what, the future is coming whether we like it or not.
3. 40% OF Australian workers are forced into retirement before they are financially ready to retire – This is due to illness, injury, and many other factors. Yet we live our lives as though everything tomorrow is going to be just fine.
4. Most Australians are retiring on a benefit far less needed to sustain them in retirement meaning they will need to access social security to survive. (So after working their fingers to the bones for 50 years they end up on government handouts).
5. You are only ok as long as your Super lasts- That means we need to take responsibility and act beyond what our Super will deliver. If your Super isn’t over a million at retirement, you could run out of money.
6. The CPA, the body representing the accountancy profession, compulsory Superannuation has had minimal impact on Australians capacity to save for a self-funded retirement- Again, Super alone isn’t enough.
7. Positive geared properties without significant growth will not deliver the growth you need for financial freedom.
With a positive geared property offering $600 pm in your pocket, for 97 years at 3% interest, will only just reach $1million.
So how do you work through these stats, and what are the statistics of those who step outside the square. Here goes:
Association of Super Funds Australian state that financial freedom is $60,000 per year.
But for how any years? Well in 1898 the average Australian was in their late 50’s and died soon after, on average. In 1945 the average Australian lived to their late 60’s early 70’s. In 1985 the average Australian lived to their late 70’s. Today the average Australian lives to their late 80’s. So as you can see, we are living longer. Great news right.
Therefore, financial freedom equates to $60,000 per year between the average age of retirement of 68 and the lifespan of you reading this article. On average then you need to plan to live to your early 90’s. So financial freedom is $60,000 x 25 years. That’s $1.5mil
How to achieve this in property?
Property values in Australia ALWAYS double per cycle. Watch these historical values and you will see how you can achieve financial freedom through property.
- 1972 Australian median was $16,600
- 1975 Australian median rose to $32,200 (doubled in 3 years)
- 1983 Australian median rose again to $66,400 (doubled in 8 years)
- 1988 Australian median rose to $132,800 (again doubled in 5 years)
- 2001 Australian median hit $270,000 (again doubled)
Today the median is $658,800
Therefore with 4 x strategically picked (not selected by your mum, dad, or best friend Bob, but by following a system), valued at around $400,000, acquired by you over the coming 5, 10 or 12 years, and going through a cycle, you will have achieved financial freedom. And the great news is, that those properties will do the same thing, all over again.
The current shortage of housing in Australia today is 248,000 with a big demand IN CERTAIN AREAS, for investment properties (remember, you only need 4 to achieve financial independence)1.25 Million Australians millionaires made it in Real Estate and financial holdings
Property is the cornerstone of many ultra high net worth individuals with residential property the most popular sector for investors
Millionaire numbers will grow in Australia by 82% over the next 5 years and as you can see, most will have achieved that status through property.
Australian Bureau Of Statistics ABS
Deloittes – The worlds largest professional network service provider.
Source: Mike Steketee – Inside Story – 18th Feb 2013
Inside Story 2013
Finder.com – Millionaire Calculator
Knight Frank – Domain.com