The real facts on the ageing population and impact on retirement villages – ABS underestimate impact

The Productivity Commission Report on ageing this week told us, “Australia, we have a problem” – too many people are getting too old. As a country we will not be able to afford the social security bill.
But it is worse than the report predicts. The ABS says the average man the will live to 84 and average woman will live to 87. The Actuaries Institute immediately responded with their figure of males living to 86.3 years and females living to 89 years. There median age of men retiring is 61. This means the average male has to fund 26 years of retirement, and women longer.
The challenge for village operators is that people live even longer in villages. While the average age of entry for a mature village is approaching 80, the female at least is highly likely to live more than 10 years, with the last three years requiring varying levels of care and support. Villages are being forced into the “supported living” service model – but at present do not have the HR systems and risk management controls in place. Or the financial model to pay for these extended services.
For ‘glass half full’ management, this represents opportunity for new revenue streams. For others, their village business will become marginal.
The Actuaries Institute presents a possible (grim) solution. They state that if current trends continue they expect 80% of Australians will be overweight or obese by 2020. Currently 61% of Australians are overweight or obese. They state “obesity reduces the financial risk of longevity”. (Love those actuaries)!