The murky future of retirement

Around 74 per cent of Australians aged 45 and over dream of retiring early, but their financial situation will most likely prevent that dream from becoming a reality.

HSBC’s The Future of Retirement: Healthy New Beginnings report surveyed more than 18,000 across the globe, and found that an average of 65 per cent of people moving into the retirement phase of life are in a similar situation.

Of the three quarters of Australians who wish to retire in the next five years, 43 per cent will be unable to, with 63 per cent saying they haven’t saved enough, 32 per cent blaming dependents and 22 per cent saying they will struggle to pay off their accrued debts by the time they are ready to retire.

A further 18 per cent believe they will never be able to fully retire.

There are many good reasons those aged 45 and over wish to retire early:

  • to spend more time with family (36 per cent)
  • freedom to travel and pursue other interests (around 65 per cent)
  • to pursue another career or engage in voluntary work
  • to join their partner in retirement
  • tired of the everyday routine
  • work has a negative impact on mental or physical health (25 per cent)
  • no longer satisfied with their current career.


But in what would seem to be a strange juxtaposition, even though financial constraints may prevent people from retiring early, more retirees expect their financial situation to improve rather than worsen in retirement. Around 36 per cent of Australians of working age expect their financial situation to decline in retirement.

Current retirees say that their relationships, social life and standard of living actually improved once they retired.

And, as much as financial difficulties are a concern to those expecting to retire in the next five years, quality of life, specifically health, is a top concern for most. Retirees are less likely to rate their health as good for their age than those who haven’t yet retired, and many are unable to predict how much they will need to spend on healthcare once they’ve retired. Around 80 per cent of Australians feel that poor health will make saving for retirement more difficult.

The HSBC report suggests that the following practical steps could be taken to ensure a more successful retirement – both financially and with regards to health:

  • start saving for an early retirement
  • plan for a longer, more active retirement
  • aim for a healthier retirement
  • consider how your healthcare needs may change in retirement.


Download the HSBC Future of Retirement: Healthy New Beginnings infographic

Read the full report

Opinion: Reality is harsher than the dream

The HSBC report doesn’t really tell us anything most pre-retirees and retirees don’t already know. What it does do is send a clear signal to the Government that it needs to address the issues.

The idea of an early retirement is, no doubt, at the forefront of most Australian workers’ minds. Who wouldn’t want to spend more time with friends and family, basking in an ideal retirement?

The reality is, however, much harsher than the dream.

Our population is ageing. It’s a fact. With more Australians bound to become reliant on an Age Pension in the future and with the Government already saying it is struggling to cover the cost of retirement, a more sustainable scheme is not just necessary, it is imperative.

Whilst funding their retirement is the primary concern for most Australians, and with a new Centre for Independent Studies report claiming that the burden of funding the Age Pension, which around 75 per cent of retirees currently claim, will increasingly fall on younger generations, it is clear that the Government faces a real challenge of figuring out how to fund the pension.

An ever-extending life expectancy, the deferring of retirement age and when retirees will be able to access the Age Pension, makes the Government’s task even more difficult.

Add to that the recent rise in private health insurance premiums and you’d be forgiven for thinking that it’s we, the people, who will provide the necessary funds for retirement in the future. 

And that’s not so bad, so long as the system is fair for all and not just the wealthy.

Perhaps one of the more harrowing statistics presented in the report is that 18 per cent of those aged 45 and over may never fully retire, which is especially distressing considering that the employment opportunities for older Australians are so bleak. 

Many Australians may have the vision of the perfect retirement, or at least one that is relatively comfortable but, overall, for most the roadmap to retirement seems murky. It’s time the Government cleared a path for an equitable and sustainable retirement for all.

What has your experience of retirement been? If you haven’t yet retired, what are your expectations of retirement? Do you have any suggestions for how the retirement system can be made fairer for all? 

Related articles:
Your retirement survival guide
Retirement planning disconnect
Retirement affordability suggestions
The Age Pension bunfight

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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