Australians too poor to retire

There has been a dramatic change over the past decade in how Australians view the retirement age, with more than ever before intending to work beyond 70 years of age. While the fact that this generation is ageing in a much healthier way than previous generations will influence many to remain in work for longer, financial uncertainty is still the bigger influence on working beyond 70.

The latest Australian Bureau of Statistics (ABS) data reveal that in the last decade the number of over 45s who say they will not retire before turning 70 has increased from eight per cent to 23 per cent.

The data shows that financial security is the key influence in deciding to work beyond 70 for 40 per cent of men and 35 per cent of women. Personal health, physical abilities and reaching eligibility age to receive the Age Pension were the other key influences.

The ABS survey produced similar results to the recent MLC Wealth Sentiment Survey, in which it was revealed that nearly one in five Australians believe they will work past 70 years of age. The research shows a direct link between a person’s accrued wealth and their expectations of retirement age.

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Opinion: Where has the safety net gone?

The Age Pension has always been an entitlement for a life of hard work and paying taxes to build a better Australia, but the Age Pension is also an important safety net on which retirement in this country is built.

This safety net is slowly being ripped from underneath our ageing population, with the Age Pension qualification age increasing to 67 by 2023 and further conservative government legislation ready to raise it to 70 by 2035.

The research shows that many Australians are expecting to work longer to save a little more money in order to supplement their retirement income in addition to receiving an Age Pension. But not everyone will be so lucky to be physically fit past 65 – or be able to find a job. Whilst there are fewer unemployed older workers that younger ones, the time out of work before becoming re-employed is more than 12 months for 70 per cent of these mature age workers. The average time for an older worker to become reemployed is a disheartening 483 days. For all jobseekers, the average is 294 days.

There is also the issue of planning for retirement, the onus of which has been placed firmly in the hands of individuals. This is all well and good but the reality is that, due to ever changing retirement income policy and legislation, and uncertainty about which changes will be introduced in the intervening years between work and retirement, makes it incredibly difficult. In fact, the impending Federal Budget 2016/17, which will take place on 3 May, is likely to deliver a change to superannuation taxation, at the very least.

What do you think? If the Age Pension qualification age increases to 70, will there be enough jobs for the 65–70 year olds to gain employment? Are you planning to work until you are at least 70? And how will this older cohort adjust to the ever increasing rate of technological change the in the workplace?

Written by Drew Patchell

Drew Patchell was the Digital Operations Manager of YourLifeChoices. He joined YourLifeChoices in 2005 after completing his Bachelor of Business at Swinburne University. Drew has a passion for all things technology which is only rivalled for his love of all things sport.

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