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money online techniques. We accept article submission with a reciprocal
text ad on a useful page.
Will Women face Financial Hardship in Retirement?
By Debra Lohrere
The looming hardship that will be faced by many of the baby boomers
once they retire could well affect women a lot harder than men. The
likelihood of the government being able to afford any sort of
reasonable amount of pension is very slim, simply because of the
magnitude of the number of people who will be retirees, compared to
the working population. The Australian government has realised this,
and that is why they introduced the compulsory employer paid
superannuation scheme and are even now beginning to give financial
incentives to Self-funded retirees. They are also now encouraging
people to work well beyond the 65 year barrier. (continued below ...)
By Debra Lohrere
The looming hardship that will be faced by many of the baby boomers
once they retire could well affect women a lot harder than men. The
likelihood of the government being able to afford any sort of
reasonable amount of pension is very slim, simply because of the
magnitude of the number of people who will be retirees, compared to
the working population. The Australian government has realised this,
and that is why they introduced the compulsory employer paid
superannuation scheme and are even now beginning to give financial
incentives to Self-funded retirees. They are also now encouraging
people to work well beyond the 65 year barrier. (continued below ...)
| Financial Hardship in Retirement |
Most people have never sat down and even considered the
ramifications of why the compulsory super was introduced and
for many of us it is a matter of too little too late. Even for the
young women in our society – who have a full working life ahead
of them, they still cannot rest assured of a comfortable
retirement.
Why is this? It is because that unfortunately even with
contributions at the current level of less than 10%, someone on
an average wage who works continually for 30 years, is still
going to find themselves trying to survive on an income
equivalent to less than $20,000,00 per annum in today’s dollars.
You will notice that I said continually working for 30 years. This is
another reason why women are particularly disadvantaged,
firstly because they often have to take up to ten years leave from
the workforce to raise children, secondly because women in
general earn less than their male counterparts and thirdly
because an enormous proportion of the women in Australia, will
never have received any previous superannuation contributions,
prior to the compulsory superannuation being introduced, and
will therefore not have had contributions made over their entire
working life so far, giving them even less to fall back on by the
time they retire.
Many women may previously not have thought of lack of
superannuation contributions as being a problem, as their
husbands may have been contributing to super since they first
began work. Unfortunately though with the high number of
divorces in this country, it is unwise to rely on the fact that your
partner’s superannuation will be there for you in your retirement
years and even if a large proportion is awarded in a settlement –
that it will be sufficient to sustain a comfortable retirement for any
length of time.
All of these factors are why women now more than ever, need to
begin taking action to build up a source of ongoing income, that
will grow to such an extent, as to be able to provide a secure and
happy future for themselves and their children.
It needs to be a source of income that is unrelated to physical
work…that is an income that is generated from income
producing assets – and not from our personal efforts.
One of the best sources of creating this ongoing income stream
is to begin building an investment portfolio property, also aptly
paraphrases as bricks and mortar.
We need to start collecting income producing assets now, so
that they will have time to grow and develop so that we will be
financially independent for our retirement years.
Property is one of the best types of income producing assets,
mainly because through gearing, which is borrowing other
peoples money to supplement our own, we are able to control
assets of a far greater value, and benefit from the growth on the
overall value, including the borrowed portion, in contrast to only
benefiting from the growth on the small portion of our own
money contributed.
For example, if you have $10,000.00 invested at 7%
compounding, then in ten years it will grow to around
$20,000.00. If on the other hand you have used that $10,000.00
as 5% deposit on a $200,000.00 property, which grows in value
by 7% per year, then after ten years the property would have
grown in value to nearly $400,000.00 giving you a profit of almost
$190,000.00 instead of a profit of $10,000.00 had you just
invested your own money. After 30 years your money alone
would have grown to just over $76,000.00 and the geared
property would have grown to more than $1.5 million.
This example of course has not taken into account the initial
purchasing costs involved to secure the investment property, nor
has it taken into account the rental income that you would also
be receiving….I have simply used it to demonstrate that the
more assets that you can get working for you, the better off you
will be. Debra Lohrere http://www.investmentpropertybooks.com/
ramifications of why the compulsory super was introduced and
for many of us it is a matter of too little too late. Even for the
young women in our society – who have a full working life ahead
of them, they still cannot rest assured of a comfortable
retirement.
Why is this? It is because that unfortunately even with
contributions at the current level of less than 10%, someone on
an average wage who works continually for 30 years, is still
going to find themselves trying to survive on an income
equivalent to less than $20,000,00 per annum in today’s dollars.
You will notice that I said continually working for 30 years. This is
another reason why women are particularly disadvantaged,
firstly because they often have to take up to ten years leave from
the workforce to raise children, secondly because women in
general earn less than their male counterparts and thirdly
because an enormous proportion of the women in Australia, will
never have received any previous superannuation contributions,
prior to the compulsory superannuation being introduced, and
will therefore not have had contributions made over their entire
working life so far, giving them even less to fall back on by the
time they retire.
Many women may previously not have thought of lack of
superannuation contributions as being a problem, as their
husbands may have been contributing to super since they first
began work. Unfortunately though with the high number of
divorces in this country, it is unwise to rely on the fact that your
partner’s superannuation will be there for you in your retirement
years and even if a large proportion is awarded in a settlement –
that it will be sufficient to sustain a comfortable retirement for any
length of time.
All of these factors are why women now more than ever, need to
begin taking action to build up a source of ongoing income, that
will grow to such an extent, as to be able to provide a secure and
happy future for themselves and their children.
It needs to be a source of income that is unrelated to physical
work…that is an income that is generated from income
producing assets – and not from our personal efforts.
One of the best sources of creating this ongoing income stream
is to begin building an investment portfolio property, also aptly
paraphrases as bricks and mortar.
We need to start collecting income producing assets now, so
that they will have time to grow and develop so that we will be
financially independent for our retirement years.
Property is one of the best types of income producing assets,
mainly because through gearing, which is borrowing other
peoples money to supplement our own, we are able to control
assets of a far greater value, and benefit from the growth on the
overall value, including the borrowed portion, in contrast to only
benefiting from the growth on the small portion of our own
money contributed.
For example, if you have $10,000.00 invested at 7%
compounding, then in ten years it will grow to around
$20,000.00. If on the other hand you have used that $10,000.00
as 5% deposit on a $200,000.00 property, which grows in value
by 7% per year, then after ten years the property would have
grown in value to nearly $400,000.00 giving you a profit of almost
$190,000.00 instead of a profit of $10,000.00 had you just
invested your own money. After 30 years your money alone
would have grown to just over $76,000.00 and the geared
property would have grown to more than $1.5 million.
This example of course has not taken into account the initial
purchasing costs involved to secure the investment property, nor
has it taken into account the rental income that you would also
be receiving….I have simply used it to demonstrate that the
more assets that you can get working for you, the better off you
will be. Debra Lohrere http://www.investmentpropertybooks.com/
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