Retirees suffer lower pension incomes due to GFC

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As reported in the Sunday Telegraph, a new report by Superratings.com.au has shown that the global financial crisis continues to decimate the retirement incomes of senior Australians. Thousands of self-funded retirees have been forced to take cuts of up to 30 per cent in their  superannuation pensions,  and many are beginning to turn to reverse mortgages to ‘plug the gap’.

The Superratings data shows that somebody retiring with a pension fund of $700,000 in 2007 could have expected an annual income of $45,000 for 20 years. But because of the stock market crash and weak performance in the past few years, that income has to be cut to $32,000 today otherwise it will run out years ahead of schedule. 

Many self-funded retirees are now really struggling financially, despite years of prudent saving. Thousands have turned to Centrelink to claim a part-pension to top up their incomes, but even this is often not enough. At Seniors First we’ve seen a huge increase in self-funded retirees coming to us for a reverse mortgage to help with larger expenses and to provide a back up line of credit in case their superannuation balance does not recover.