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Bureaucracy, tea and longevity
A new study has found male civil servants live for 19.4 years after retiring at 65 compared to 17.7 years for the average person.
The Mercer Human Resource Consulting research study was based on mortality data from the four major public service superannuation schemes, said principal Dr David Knox.
“Female public servants are also living longer than other Australian women — an average of 22.2 years after the age of 65, instead of 21.2 years,” he said.
“However, a fascinating finding of this study is that once this group attains the age of 85, their mortality rate rises above the mortality rate of the general population.”
While a long life might bring pleasure to some, funding this lifestyle will require more superannuation.
“Even living just one and a half years past ordinary life expectancy means the retiree’s superannuation will need to stretch 10 per cent further,” Knox said.
Why former civil servants live longer was attributed to two factors, the study found.
“On average, these individuals are likely to have higher educational standards and income,” he said.
“This leads to different lifestyle choices and better access to health services than the general population, which leads to lower mortality rates.”
The ability of civil servants to live longer has strong implications for financial planners who must factor this into plans for wealth creation.
“It confirms that financial planners for Australians with significant assets should not base their life expectancy estimates on the Australian population tables because these are likely to underestimate their life expectancy and the amount of superannuation they will require,” Knox said.
“Such an approach is likely to lead to significant shortfalls in the later years of retirement.”
This Australian research is consistent with UK studies that also show high-net-worth individuals with good retirement savings live longer.
The research there showed 70 to 74-year-old males with pensions of more than $32,400 a year were 50 per cent above the mortality rates for people with pensions of a third of that amount.
AUTHOR
Mike Taylor
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