Australians are retiring early

The average age of retirement in Australia for 2012/13 was 53.8 years of age.

Australians are retiring early

Almost one fifth of the workforce aged over 45 say that they are not planning to retire until at least 70. This is in line with the government’s plea for Australians to work longer, including a staged increase to the retirement age up to 67 by 2023.

New research from the Australian Bureau of Statistics (ABS), however, suggests that the government could face some resistance to the higher age. The ‘Retirement and Retirement Intentions’ survey, undertaken in Australia, has shown that Australians are taking early retirement. During the 2012/13 financial year the average age of retirement for people aged over 45 was 53.8 years, with an average retirement age of 59 for men and 50 for women.

These 2012/13 retirement statistics are not in line with the results of the survey into intended retirement age. Almost half those surveyed said they intended to retire between 65 and 69, 25 per cent between 60 and 64 and 17 per cent at 70 years of age or older. That only leaves nine per cent who believe they will retire before 60, a far cry from the 75 per cent of men who retired last financial year before 60, and the 55 per cent of women who retired before 55.

Looking at a larger group of retirees, the ABS has reported that, among men and women whose final job was held in the last 20 years, commonly reported reasons for ceasing work were ‘reached retirement age or eligible to access superannuation or pension’ (44 per cent of men and 30 per cent of women), ‘sickness, injury or disability’ (25 per cent of men and 21 per cent of women) and ‘retrenched, dismissed or no work available’ (10 per cent of both women and men).

The survey comes in the wake of the Productivity Commission suggesting that the pension age be lifted from 67 to 70, an idea which has not been endorsed by the Abbott Government.

So how are these retirees funding themselves? Half of those who intended to retire expected their main source of income to come from superannuation, through annuity or allocated pension. In reality, this was the main source of income for only 25 per cent of men and 10 per cent of women. Instead, 51 per cent of men and 42 per cent of women are being funded by a government pension or allowance. Approximately 44 per cent of women reported their partner’s income as their main source of meeting living costs after retiring.

At the time of the survey there were over 190,000 Australians aged over 45 years who had previously retired, but were either back in the labour force or were planning to find work in the future. The majority of this group were women (114,000), and about 92,000 of those women had already found work. Over 40 per cent of those returning to the work force cited financial need as their reason for going back to work, while 30 per cent stated that they were bored and needed something to do.

Read the full report at the ABS website

Find out more from the Sydney Morning Herald

 

Opinion: How are we getting it so wrong?

The government wants us to retire at 67, a higher age driven by Australia’s steadily increasing life expectancy. The longer we live, the longer that we need to be able to fund ourselves and that money has to come from somewhere. So why was the average retirement age last financial year as low as 53?

Not only are people retiring at an alarmingly early age, they seem to have very unrealistic expectations of their superannuation. Half of those retiring expected their main source of income to be their superannuation, but for women the real number was closer to 10 per cent. How are they getting it so wrong? How were 40 per cent of women and 25 per cent of men so unaware of the state of their superannuation that they didn’t realise it wouldn’t be enough to fund them?

The Australian Government is warning that, with Australia’s ageing population, funding our retirement income needs is going to become more difficult. This financial problem is only going to be compounded by those who retire early and end up relying on the Age Pension to get by, because they haven’t saved enough while they were working.

I’m not talking about those who retire because they can’t keep working, for medical or other reasons. I’m talking about those who retire early because they don’t want to keep working, without considering whether they can really afford it.

So how can we fix this problem? I’m going to suggest something pretty radical here – education. Bring in a new system whereby prospective retirees must attend a one-day financial literacy seminar on the true costs of retirement. They will have to learn how much it will cost them to retire depending on their age, how much superannuation they really need, and how much of that gap they could close if they worked for another five years (or another 15, in the case of the 25 per cent of women who retired at less than 55 years of age). And they need the certificate from this course in order to access their superannuation or the Age Pension. At least that way we would know that the choice to retire at 53.8 years of age for the majority of our population was an informed one.

What do you think? Is retiring in your early 50s selfish? Or is the problem that too many Australians don’t understand enough about finance to be making good decisions?





    COMMENTS

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    Jurassicgeek
    10th Dec 2013
    11:35am
    Trust the government to try save money at seniors expense..lifting the retiring age is like changing the rules halfway through a football game. We should be lowering the retiring age instead of lifting it...Using the excuse of longer life they sit on their shiny arses and scratch their bald heads and wonder how many ways they can rip the seniors off now...some of us had little or no super to plan ahead with..Those who had super all their working lives had at least a chance of a reasonable retirement...those who rely solely on the pension...not so good. When do governemnts begin to realize the contributions we oldies have made ..we have worked for 50 odd years and deserve a little respect..we should be honored not condemned to a life of poverty and constant struggling to make ends meet...
    tisme
    10th Dec 2013
    12:09pm
    I am a carer have worked 24.7 for 30 years, I don't have any superannuation , don't get minimum wage etc. The work I do isn't recognised. Im not looking forward to retirement at any age.
    tia-maria
    10th Dec 2013
    12:57pm
    Retired pensioners worked hard and paid their taxes are their working days............ deserve the respect from our politicians............. and the younger generations who think we should have super saved ???from our working days.........back than........ (we never had the dole.......... if you were out of work) Not like today were younger generation have the dole, baby bonus,dad materninty leave, this to me is a bloody joke and insult to our Hard Working Retired Seniors from yesterday.
    dougie
    10th Dec 2013
    1:53pm
    If you are not well and work is a problem then you have no other option but to retire. If you have a spouse who needs your care then you must retire. However if you are forward thinking and plan your retirement I do not see a problem. I planned to work past retirement age but due to a health problem I had to retire at age 65. I had planned on the basis that I would retire at 65 with no great super fund but savings to help. Since that time my wife and I have both recovered our health to a fair degree and live on the aged pension. We do very well and each year we holiday and ensure that we travel. When we no longer feel able then we will cease this activity. Our health is good and we are looked after by a wonderful health system and a caring GP.
    I realise that not everyone is as fortunate as we but yes if things go reasonably well and our expectations are not overwhelming then we can enjoy our final years in some form of comfort.
    tia-maria
    10th Dec 2013
    2:16pm
    dougie,
    good to see that the both of you have a yearly holiday, we cant afford one ourselves..............yes we have chronic health issues but we are not sitting around crying about it........... other wise we may as well be 6 foot under...........but again the pensions worked hard in our day and paid taxes no hand outs back than from our politicians.
    heyyybob
    10th Dec 2013
    2:26pm
    Empathise with all the above comments. It definitely HAS been forgotten (or ignored) by our Government that many, many Australians who worked hard ALL their lives, had no super to look forward to, top up or invest in ARE doing it tough :( Merry Christmas to all and wish you a healthy and enjoyable year in 2014.
    tia-maria
    10th Dec 2013
    4:22pm
    heyyybob,
    spot on mate it was a different story back in our day...........merry christmas to you
    Teddy
    10th Dec 2013
    2:40pm
    Those people who are forced to'retire' because they cannot obtain work are poorly served by the media and fellow seniors who persistently portray those over 50 as 'the most vulnerable' or needy technophobic 'oldies'. Unfortunately this portrayal leads younger employers to conclude that older workers will be a 'drag' on the rest of the team. We cannot have it both ways. Either we are competent adults or frail old fogies. Your decision impacts on many others who wish to work.
    Rhonda Nay
    10th Dec 2013
    2:57pm
    Totally agree Teddy! With ageism rife in the employment sector it is very rough to assume (as the Age also reported) it is the older people ignoring gov. Work is generally good for health and older workers good for the economy. More carrots and sticks for Employers until they have the brains to realise what older workers bring.
    BlackCatWalking
    10th Dec 2013
    3:08pm
    ...."How are they getting it so wrong? How were 40 per cent of women and 25 per cent of men so unaware of the state of their superannuation that they didn’t realise it wouldn’t be enough to fund them?"....

    We do not know from the research that they were that ignorant about their retirement finances.

    ...."I’m talking about those who retire early because they don’t want to keep working, without considering whether they can really afford it"...

    Again we don't know what is behind the reason for not wanting to work anymore. I don't think the research drilled down enough to be able to understand why people say they don't want to work anymore. Perhaps they have spent a lifetime in low paid, unfulfilled work, and can't take it anymore. That old myth that any job is better than no job is exactly that, a myth. Perhaps they leave because of mental health issues. If you enjoy your work, then retirement doesn't seem like a god send. If you have professional work, your chances of remaining in the workforce are greater for a number of reasons including; stability of the work, meaning and achievement attached to it, the ability to be flexible and find more meaningful work. Professionals can move into other so called 'encore' careers or they can downsize into consulting work. They have greater flexibility.

    Perhaps the question isn't "how are we getting it so wrong". Instead, we should seek to understand why healthy Australians capable of continued work, choose to leave early.
    tia-maria
    10th Dec 2013
    4:27pm
    hey blackcatwalking?
    we retired in our 60s due to chronic medicial issues and if I had been able to I would rather be employed and earning a living instead of living on peanuts...........ps and seeing asylum seekers???given all the benifits that we should be getting.
    geowhiz
    10th Dec 2013
    3:08pm
    Approximately 50% of our working population work for various forms of government. How many of the early retirees are public servants with very generous superannuation, years of accumulated long service leave and large final payouts?
    Perhaps your early retirees figures should be broken down into government and non government categories to obtain a clearer picture.
    KSS
    10th Dec 2013
    3:16pm
    If you are medically retired in your early 50s (or at any age) you should be supported if you do not have the funds to support yourself. Those made redundant in your 50s and unable to find new employment should also be supported. Retiring in your early 50s is not selfish IF you have appropriate resources to do so. Good luck to those that can.

    However, retiring 'early' simply because you don't want to work anymore and expecting to obtain a government funded pension (because "I worked hard and paid my taxes") - that is something different altogether. Yes I think that is 'selfish' and smacks of the entitlement mentality of which the younger generations are often accused.

    Things are different now from the past and in 20 or 30 years they will be different again. I agree that education is the key if only to put expectations into perspective, but it needs to happen sooner, not on the eve of retirement. Those beginning their working life and those only mid way through need to be far more realistic about what is possible. Those of us towards the end of our working life now may not have had the same opportunities to save for retirement - certainly not in terms of superannuation (and women continue to be disadvantaged in that with time out for child rearing) and may continue to need the government pension to some degree or another. As has been mentioned in other discussions about this topic, the current situation is not sustainable and the next gerneration will need to more prepared to fund their retirement - whatever age that may be.
    tia-maria
    10th Dec 2013
    4:30pm
    KSS, I am not talking about the young 50s retired BUT the 60s plus who worked hard and paid taxes their the one who be shown respect and our politicians she give us more and stop giving to the young families..........and all their benifits
    Mrs Hedgehog
    10th Dec 2013
    4:41pm
    We have to remember that the work culture has changed, especially for women. When I left school women worked for a short time, often without superannuation, and then left the work force to have babies and raise a family. There was no maternity leave or child care or 'baby bonus' and many of those new to the country had no family to assist them. Since then many women have gradually retrained and returned to the work force and paid into superannuation, but often working in low paid positions, so the final amount they have saved to live on in retirement is tiny, and after retirement the super funds deduct enormous fees with impunity until nothing is left.
    The truth is that many of the women you are talking about are financially savvy, just poor, and are often kicked out of the workforce with 'voluntary redundancies' so businesses can be perceived as being young and vibrant, a young and pretty face is still an asset in many positions.
    Penqueen1949
    10th Dec 2013
    4:48pm
    A good friend of mine decided that he was going to retire at 55 because his older friends who waited till 65 dropped dead shortly after retirement...... He had the means to do it through salary sacrifice and never being married or having children to bring up and educate he was able to put more money into saving for early retirement. This man worked hard in his employment and did not waste money on drinking, smoking or gambling either. I say good luck to him knowing that he enjoys his retirement.
    KSS
    10th Dec 2013
    5:37pm
    Good luck to him indeed. He worked hard, saved for retirement and had the means to retire when he wanted. No argument here.
    Penqueen1949
    10th Dec 2013
    4:48pm
    A good friend of mine decided that he was going to retire at 55 because his older friends who waited till 65 dropped dead shortly after retirement...... He had the means to do it through salary sacrifice and never being married or having children to bring up and educate he was able to put more money into saving for early retirement. This man worked hard in his employment and did not waste money on drinking, smoking or gambling either. I say good luck to him knowing that he enjoys his retirement.
    Penqueen1949
    10th Dec 2013
    6:06pm
    Hmmm my wonderful wireless mobile broadband lets me down again..... by not being obvious that the first post was going through.....
    Rosscoe
    10th Dec 2013
    7:11pm
    Excellent discussion! I get really cheesed off with these so-called superannuation experts who say that people aren't not putting enough of their savings into their super to enable them to retire in comfort. The simple reason people don't save enough is that they don't get paid enough! Average and below average income workers are struggling to feed, clothe and educate their family members. I don't feel any empathy at all for the so-called high-fliers in the community who have lived off the fat of the land for all their lives! So many of these people have, and will continue to make, bad decisions that affect the lives of front-line workers. E.g. setting up call centres so that Australian jobs are exported overseas, or senior officers in the public service who add are good at one thing only - sucking up to their bosses to get promoted themselves.
    tisme
    10th Dec 2013
    7:33pm
    meanwhile the qld govt is spending I billion on a building to house the polies etc
    Nightshade
    10th Dec 2013
    8:33pm
    THE AUSTRALIAN BUREAU OF STATISTICS
    Is this the same BUREAU OF STATISTICS that also say that 30% of Australian children are OBESE
    tell that to parents with kids who won't eat
    who worry about their kids develop life threatening eating disorders
    which is most of Australian kids
    I sat outside 9 schools at lunch time trying to find these 30% OBESE KIDS with no joy
    It begs the question - for whom are the BUREAU OF STATISTICS beating the drum ...?
    .......
    WORK TILL YOU DROP
    Nightshade
    10th Dec 2013
    8:58pm
    criminal negligence -
    culpable negligence
    negligence
    nonperformance
    carelessness
    neglectful
    willfully blind
    reckless
    failure to act with the prudence that a responsible person would exercise under the same circumstances -
    to incite -
    to stir up
    to provoke to action
    to stimulate to action
    urge on
    under false pretenses
    using deceptive means or information
    Nightshade
    10th Dec 2013
    9:03pm
    CAN ANYONE SEE THE POTENTIAL FOR A CLASS ACTION HERE !
    IN FACT SEVERAL CLASS ACTIONS
    WITH A REAL $$$$ PAY OUT
    Nightshade
    10th Dec 2013
    9:07pm
    never throw out the baby with the bath water mate !
    tisme
    10th Dec 2013
    9:51pm
    I would love to sue the government for what they are doing the carers. we are paid by them yet we don't have any rights etc
    Crazy Horse
    10th Dec 2013
    10:20pm
    I'm 59 with two kids still at school and no plans to retire until they graduated. That was untiI I was recently retrenched. Now I wonder if I'll ever find another job.
    heyyybob
    10th Dec 2013
    11:11pm
    Yep. STILL empathise with the hundreds of thousands of Australians who worked in 'ordinary' jobs (a great deal of them quite physical) and who would now be in their late sixties and beyond. These folk came from an era where they were probably the sole bread winner or may have been lucky enough to have a partner who had a job before she had their first child which usually meant the end of that income. Remember this was before all the allowances that are available now. If they were lucky or VERY frugal may have been lucky enough to manage a bank loan to purchase a modest home. BUT they didn't have the 'backup', advantage etc of the compulsory super payments made by their employers. These Hard Working Aussies (and a majority of them DID work hard) were/are dependent on the Old Age Pension which was supposed to support them as a reward/right for having worked all those years helping (with others younger) make this a Great Country. Usually they had risked their lives for 4-5 years in one of The Great Wars also :( They are STILL deserving of a better deal from ANY party Government that is sitting now.......instead of waiting for them to 'fade away' :( Really pizzes me off when I read of people retiring in their 50's. Good luck to them and I hope they earned/are worthy of the largesse that enables them to do so BUT I just cannot stop wondering how the folk I have described feel when they hear people complaining. *sigh. I have to say it again, to cheer myself up.....Merry Christmas to one and all.
    unicorn
    11th Dec 2013
    8:25am
    All that is okay if you have job which suits and you don't move to another district like we did when my husand was forced into early retirement. Then it was impossible for me to gain employment because I was "too old" in the opinion of all potential employees. Once you turn 40 years of age most employer's are of that opinion especially if you are an office worker. The chosen age for such a job is around 20, so I found.
    whatsupdok
    11th Dec 2013
    1:57pm
    If you are on a pension like DSP or the OAP. You can retire in Asia and live better than you can in Australia on less than the full pension excluding supplements and rental assist. That is just sick. It's a statement that Australians are getting screwed at home and future retirees had better wake up and ask, why? That's the real reason they are deleting benefits, time allowed out of the country and breaking the pension up into components. So that it gets harder and harder to live outside Australia and too hard to live in Australia without working. It's forced employment people, wake up.
    tisme
    11th Dec 2013
    4:31pm
    we cant really blame the politicians, they do what they do cos they know they can with no one to stop them. ( like all Australians going out on strike ( like the Egyptians did )
    tia-maria
    11th Dec 2013
    8:13pm
    tisme,
    yes how about the retired taxpayers take a stand ??and let these damm politicians we are not going to take it any more and start treating us with more respect.
    BlackCatWalking
    12th Dec 2013
    9:23am
    The Australian Bureau of Statistics also has data on the number of people in 2011 (1,530) aged 75 and over who died as the result of having a fall. Women represented just over half of these.

    So if the government attempts to increase the working age to 70, that means for a significant portion of the community, they will have a short retirement and then die. Is this how we want to treat older Australians?
    Jurassicgeek
    12th Dec 2013
    12:12pm
    BlackCat Walking, if the government can increase our working life and thereby reduce the amount of time/money spent on the pension..they will do it. They are hoping we all drop on retirement day....it then costs them nothing to support us.They have a "work till you drop " mentality...they will persue this agende vigorously..sorry Black... got no faith in the bloodsuckers running this country..
    tisme
    12th Dec 2013
    10:23pm
    they are hoping we will act like the apathetic dumb suckers they believe us to be, whinge for a while then forget about It cos we don't think things will change or we are too tired to do anything about it
    jaywalker
    13th Dec 2013
    10:40am
    You also have to remember that super wasn't compulsory until recently and many people our age chose not to pay into it, (thinking they would never get old perhaps) or cashed it in when they moved or changed jobs. Now, that isn't possible and super is transportable and can't be cashed in until retirement age.

    I'm one of the lucky ones I suppose, having been a public servant (in the form of a teacher) all my life and being under the old scheme of an indexed life pension. My partner ,however, has very little because he chose to cash it in several times during his first marriage. I realise some people didn't have opportunities but others did and made a poor choice earlier in their lives which they live to regret. It's never easy to really accept when you are young that you need to save for your old age.