Australian life expectancies are continuing to change, which may have a pronounced impact on how long business owners will need to wait before selling up or handing over the reins.
Australian women now have the highest life expectancy ever recorded, according to the latest figures from the Australian Bureau of Statistics (ABS), climbing to 84.6 years in 2016.
This is an increase of 1.1 years since 2006, when life expectancy sat at 83.5 years.
Traditionally, the life expectancy of men has been shorter than women. And while this remains the case in Australia, it appears the gap has begun to close.
Life expectancy for men increased faster than for women in the decade to 2016, climbing by 1.7 years to reach 80.4 years.
According to the ABS, Australian men now have the third-highest life expectancy in the world, marginally behind Iceland and Switzerland (80.6 years and 80.5 years respectively).
Australian women have the sixth highest globally, with Japan topping the list at 86.4 years.
Longer life expectancies will increase the amount of money required to fund retirement. And in the case of business owners, that may mean working longer to save up more capital and/or add additional value to the business to enhance the final sale price.
Such moves will need to be factored into any business succession plans that are drawn up, ensuring any sale or transition delivers enough revenue – together with superannuation – to fund retirement years.
My Business has spoken with a number of family businesses that prefer a more gradual transition, whereby the older generation steps away from day-to-day operational duties and into more of a part-time consulting and oversight role.
Such a move ensures knowledge and skills are retained within the family business for subsequent generations and, crucially, allows senior figureheads to retain a regular salary for longer.