Boomers less reliant on pension

An annual snapshot of older Australians has found that fewer people are relying on the government-funded Age Pension than they were 20 years ago.

The Australian Institute of Health and Welfare (AIHW) released its annual snapshot of Older Australia on Monday, outlining the key characteristics of the 3.8 million people over the age of 65 living in Australia.

The AIHW research showed that nearly three quarters of Australians aged 65 and over owned their own home, but perhaps the most surprising figures related to the Age Pension.

In 1997, around 75 per cent of those aged 65 and over received at least a partial Age Pension payment. As of June last year, that proportion of over 65s relying on a government funded pension had dropped to just 66 per cent, or 2.5 million people.

According to the report, one in seven Australians were aged 65 years and over last year.

Australians are increasingly working to older ages. In January 2018, Australians aged 65 and over had a workforce participation rate of 13 per cent (17 per cent for men and 10 per cent for women), compared with eight per cent in 2006 (12 per cent for men and four per cent for women).

The rate is likely to continue to increase as the retirement intentions of Australians change. In 2004–05, just eight per cent of Australians aged 45 and over intended to work until age 70, compared with 20 per cent in 2016–17.

In 2016–17, the average intended retirement age was 65 (66 for men and 64 for women), with 22 per cent of men aged 45 and over intending to work beyond age 70.

Access to superannuation to supplement the Age Pension has become increasingly important.

In 1997, 12 per cent of retired Australians aged 45 and over stated that superannuation was their main source of income, compared with 25 per cent in 2016–17. However, as compulsory superannuation only began in the 1980s, older people have not yet fully benefited from the scheme: the proportion of people aged 70 and over in 2007 who had never had superannuation coverage was 41 per cent for males and 75 per cent for females.

What do you think of the AIHW findings? Do you feel they adequately reflect your retirement situation?

Written by Ben

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