Bob Budreika is quoted in this new.com.au article on the worsening financial outlook for aging Australian baby boomers
Age Pension changes may reduce retirees incomes
Added pressure is coming from age pension changes that will knock thousands of dollars off the incomes of many retirees in 10 months’ time, while some popular shares owned by mum and dad investors have slashed the size of their dividend payouts.
“There are a lot of headwinds,” said Planning for Prosperity senior adviser Bob Budreika.
Term Deposit rates have dropped
Average term deposit interest rates have dropped by more than two-thirds per cent since 2008, from 7.6 per cent to 2.4 per cent, denting the incomes of the 3.6 million Australians aged over 65 and millions more Baby Boomers aged in their 50s.
Pension asset tests
Tougher rules for the age pension asset test from January next year will mean 300,000 retirees are set to lose part or all of their pension.
“When you do the numbers, some couples getting a full pension now are going to lose $11,000 a year combined, and if they become single because one dies, they get zero,” Mr Budreika said.
He said the income crunch would force many older Australians to consider unconventional measures such as working longer, selling their homes or taking out reverse mortgages.