What’s your retirement ranking?

Most of us like to benchmark ourselves; our income, house prices, super savings or even how many steps a day we walk. It’s a very human characteristic, but also a useful one. Why? Because knowing our place in the overall scheme of things can often help us better understand ways to improve our situation. To use a health analogy, knowing the recommended weight and BMI for our age is one way of gauging our overall health – and a trigger to spur us on to better health habits.

It’s no different with retirement and retirement income. Knowing our own ranking in the general Australian retirement landscape is very helpful information. Most of the time it’s also an affirmation of our particular situation – knowing we are ‘with the pack’ helps in some immeasurable way.

One very useful retirement benchmark is the HILDA Report. Or, to give it its full named, the Household, Income and Labour Dynamics in Australia report (currently celebrating its 20^th edition). It’s an annual but every four years it reports of the retirement ‘state of the nation’. The top level numbers tell us a lot about retirement, including:

The age at which Australians are now retiring,
the reason most people leave work,
the gap between men and women’s super balances, and
homeownership fluctuations.

Looking at each of these four trends will help you better understand your own place in the scheme of things. (The following information was drawn from the full HILDA report as well as a summary first published in The Conversation.

1. Later retirements – older workers

One in 3 Australians in their late 60s are still working. This is a major change:

In 2003, about 70% of women and almost half of men aged 60–64 had fully retired from the workforce.
In 2023, those numbers have fallen to 41% and 27% respectively.
For people aged 65–69, retirement rates have also dropped – from 86% to 66% among women, and from 73% to 61% among men.

In summary, the median age at retirement has moved from 59 (2003) to 64 (2023) from women and 60 (2003) to 65 (2023) for men.

2. Why do people retire?

According to HILDA, health problems remain the most common reason Australians give for retiring. In 2023, 29% of recent retirees said they left work because of their own or a loved one’s health. That number is down from 39% in 2003 (reflecting longer life expectancy and better health outcomes) but health issues remain the most cited reason for retirement.

Job-related factors – such as redundancy or pressure from an employer – are another major factor cited by recent retirees (27%).

And financial reasons, including becoming eligible for the Age Pension, have also become more common. The share of recent retirees citing financial reasons as their main motivation has risen from 13% in 2003 to 21% in 2023.

Gender differences in super

In 2023, the median super balance at retirement was just under A$191,000 for women and $310,000 for men. That’s a marked improvement for women – up more than 110% in real dollars (i.e. adjusted for inflation) since 2015. But significant gender gaps remain. In 2023, the median super balance at retirement was more than 1.5 times higher for men than women.

Homeownership is declining, renting on the increase

While superannuation is playing an increasingly important role in supporting retirees, housing wealth remains the most significant component of economic wellbeing for this population.

The share of retirees who own their homes outright declined from 75% in 2003 to 66% in 2023
The proportion with a mortgage increased slightly, from 13% to 17%.
In 2023, about 83% of retirees owned their home, either outright or with a mortgage, down from 88% in 2003. This overall decline of 5 percentage points reflects a 9-percentage-point drop in the share of outright owners, and a 4-percentage-point increase in the share retiring with a mortgage.
Over the same period, the share of retirees living in private rentals has doubled – from 6% in 2003 to 12% in 2023

As noted by one of the four HILDA authors, Kyle Peyton,

“Australia has seen a dramatic transformation of retirement over the past 20 years, with more Australians delaying retirement than ever before, reshaping expectations for later life.

This shift matters because it marks a fundamental change in how people transition out of the workforce — with important implications for financial security in later life.”

Just to repeat Kyle Peyton’s observation, the way we leave the workforce has important ramifications for our financial security.

We’ve seen from the above HILDA findings that this will most likely be due to health, job issues, financial or lifestyle needs. While we can chart these trends and benchmark ourselves, there really is no such thing as a typical retiree. Every household has it’s own needs, challenges, financial wherewithal and attitudes towards money that also influence spending levels. What suits Bill down the road or Martha and Harry in the flat next door may be the absolute opposite of what you call a good retirement lifestyle.

So how should these factors affect your planning, decision making and/or responses to both short and long term financial concerns?

This is where knowing the rules helps. While no one can anticipate the unexpected – a health decline or crisis, job loss or reduction in hours or sudden downturns in the share markets, we can access the information we need to review our options, decide on the best strategy for our individual situation and seek help to validate or revise these strategies, so we are responding in the most appropriate way to meet our full retirement journey needs. It’s all about cool, sound judgement based upon a thorough knowledge of the rules. If you don’t know all the rules, that’s fine – you can recognise this and seek support from someone who does! The important thing is that you know where you stand are prepared to take action to continue to maximise your income. That’s what true financial control really looks like.

Here are some recent articles on health, handling leave as you exit the workplace and predicting your long-term financial income.

Are you struggling with knowing what to do or how to get started? This is why Retirement Essentials offers short, obligation-free 10-minute calls with one of our friendly team to explain the different consultations available and which would be most suitable for you. You can book a quick discussion today to clarify your needs and the type of support that best suits them.

Those who have a clear idea of the type of financial advice that would assist them the most will find a Retirement Advice Consultation can be tailored to their personal situation, providing clarity and practical next steps.