More older Australians are staying in work for longer, creating a new ‘peak’ retirement age, according to a new KPMG report.
Analysis by KPMG Urban Economist, Terry Rawnsley, suggests that Australian workers are retiring at their oldest age since the 1970s. This higher expected retirement age has remained unchanged over the past two years, which suggests a major shift since the Covid pandemic.
- The expected retirement age for men is now 66.2 (highest since 1972).
- The expected retirement age for women is now 64.8 (highest since 1971).
Drivers for these changes are increased flexibility in what Rawnsley calls ‘knowledge intensive’ roles, also the increase in working from home which has allowed many older Australians to ‘semi-retire’ or work from home or a holiday location.
Whilst it seems that older workers ‘filled gaps’ during the Covid years, the labour market has since tightened with the return of international migration and growth in the under-55 labour force.
More women are also working full-time with the expected age of retirement from full-time work increasing by 12 months. Somewhat conversely, the later age of retirement for men is seen to have been encouraged by increases in part-time retirement. Rawnsley noted, however, that:
“Even in a tight labour market, we may have reached a plateau in the expected age of retirement, suggesting we cannot expect older workers to continue working longer. This is because we simply can’t find enough older workers to sustain the growth that occurred during the COVID-19 era.”
Benefits of a longer working life
Working longer has more benefits than just the financial ones. There is the sense of contribution, purpose and connection. There are also the health benefits from the social interaction – and the case to be made for keeping your brain active.
The Federal Government has put policies in place to encourage retirees to work longer and to work extra hours. The main change was a $4000 increase to the Work Bonus Credit, which was previously $7800 per annum. This change became permanent on 1 January 2024. We explained these rules in some detail a few weeks ago, so here’s how this bonus works for those who choose to work more.
What does working longer mean for you?
Work is a highly individual matter. Some people love their work and never wish to stop. Others can reach a stage where stepping back, rather than out of the work force is their preferred option. Still others may wish to give up work completely.
And then there are the nearly 40% of retirees whose ability to work has been cut short by ill health or redundancy.
Regardless of your motivation, or need, making the transition to retirement requires a deft mix of emotional, practical and financial decision-making.
Retirement Essentials offers many consultations that can help you to plan, organise and execute your own pathway to retirement. Whether you need assistance to:
- Plan future income and expenditure
- Better understand your super options
- Understand the rules of the Transition-to-Retirement (TTR) strategy
- Commence an Account-Based Pension
- Maximise your pension entitlements
Retirement Essentials can offer a relevant, tailored consultation, facilitated by an adviser who will assist you to make your own best decisions.
Have you retired?
How old were you?
Is your mid-60s the likely age when you would want to step-back from full-time work?
Are money options easy to understand at this important life stage?
Some of us have no choice. I have no super, and am still paying my mortgage and I am working full time at age 74. my life sequence of events left me in this position.
I have no Centrelink benefits, no health care card, no pension rebates. I work 7 days a week just to stay on top of things financially
I am lucky I have a secure job
I being almost 68 yrs have stayed in the workforce, one unpleasant aspect a staff member started calling me old lady in his language, I am still very upset to be stigmatised as this what do you think?
Hi Anna, thanks for sharing your experience – staying in the workforce can bring many positives in addition to extra income. It’s hard to understand why a colleague would use a negative term about your age. It is also against our legislation to discriminate against anyone based on age. You may feel comfortable to have a quiet word with this person and say that this is not acceptable. Alternatively, you may wish to share your concern with a manager or HR department. Whatever you decide to do, all the best. It’s never ok to put someone down in this way. Warmest Kaye
I am 76 and still working full time in my own (retail) business 6 days a week. Having the business gives me a sense of purpose and a reason to get up every morning.
Good on you John – I imagine it also means you enjoy great social interaction and sense of achievement? warmest Kaye
what a crock, people cannot afford to retire, it’s that simple. why try to put a spin on it
Hi, yes, many of us are still working late into or lives. For many reasons. I retired last September at age 74.
So, with all this data suggesting Australians are working longer, and acknowledging that superannuation is THE best tool for retirement planning, then why are we prevented from super contributions at age 75????
Comment from Retirement Essentials please, and just don’t reply with, well, that’s the legislation! There has to be a rationale (or irrational) reason for this, not just someone in Government saying you cant contribute to your super when you turn 75.
Thanks,
Hi Stephen, thank you for your query. Generally speaking, the rationale behind the decision is because the superannuation tax concessions are designed to help fund an incomein retirement. As such, allowing ongoing contributions at any age could be exploited to generate more wealth or build up the value of an estate rather then being used to support yourself as an income. We aren’t saying this is 100% perfect but that is the balance being aimed for.
I worked in various capacities until I was 79 – when Covid changed everything. I also volunteered with children until 81, when hearing deterioration made it too difficult.
It has been quite a ride and I miss it. feel that I am now seen as someone with nothing to contribute (although charities keep requesting donations!)
I retired fit and healthy at the age of 63 and loving it.
While working I was always doing something and did not think will adjust to doing next to nothing.
I feel I have done my bit and now its time to sit back, holiday spend time with friends, family and the grandkids.
Losing 3 very close friends in a short amount of time before they even got to Retire put life into perspective for us. We decided it was time to do it early while we still could (62 and 65).
We have never looked back. We had planned well ahead that we wanted to do what we wanted with our money, and the Children and Grandchildren have their own lives and opportunities and that we had not worked all our lives to leave it all to them. We bought a Motorhome and go on Holidays around Australia and live comfortably but frugally. We do our own Renovations around the house, grown our own Veggies etc and we are busier now than when we were working. Life’s Good and we know how lucky we are!!!!