Retirement: financial constraints and health concerns the top issues

Three quarters of Australians aged 45 and over dream of retiring early but can’t.

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? 



    To make a comment, please register or login
    3rd Mar 2016
    Retirement is far from Eutopia. Having just entered that stage recently, it is a difficult time, with uncertain economic climates causing havoc.
    I have a small Superannuation that tops up my pension a little, but nowhere near as much as I expected a couple of years ago.
    The young generation can do exactly as we did for our parents and provide pension money for their retirement. This young generation are a whinging, whining lot, too busy filling themselves with drugs.
    Happy cyclist
    3rd Mar 2016
    Retirement at 45? Half their luck. I expect to retire soon at 65. My income will be modest which is what I have always expected of retirement. As for those who say they won't have their debts paid off by retirement well, maybe they took on far too much debt? The only debt I have ever taken on was a modest mortage and I never had a holiday for the first 8 years of the mortgage to get it down really fast. Its no use living above your means then complaining about having debt at retirement. On one hand many people complain about living in a "nanny state" and on the other hand they want the government to solve all their problems -- and keep them in a style they aspire to. I say "want less, spend less, enjoy more"!
    3rd Mar 2016
    What about the average worker who has worked and paid taxes all their lives, scrimped and saved to buy a modest house never had the money to take holidays and only on one wage? They retire having paid off their homes, because of low income or medium income didn't have enough to contribute to super as compulsory super didn't come in until not long before they retired if they retired with no debt they still struggle on today's pension. They didn't have any choice but to work and pay taxes how many will get the pension in the future never having contributed one penny to taxes, lived on welfare all their lives, can afford to go back to the "home" country from time to time, public housing etc. where is the fairness in that??
    3rd Mar 2016
    I find the inference that the younger generation has to fund future pensioners retirement offensive. Most have worked all their lives and contributed to the economy. There was also the National Welfare Fund which was set up in 1945 to fund pensions, which was funded by peoples taxes. I believe that this pool of money was spent by the Liberals under John Howard. So please do not treat pensioners as a burden on society they have paid their dues.
    3rd Mar 2016
    I agree with mogo51..we are not retirement age yet but have to work until we are 67yrs old....We were told many years ago that the supperanuation component of our wages would go up in following years which it never did..we have lost so much money over the years in Super and other investments that we will not have any of our own money to top anything...and the major point is that we all have payed taxes for longer than any other generation and we deserve the pension just as our parents did..We have worked long and hard so we can expect to have some means of income (pension as pityful as it is) when the government eventually let us retire!
    3rd Mar 2016
    At 76 I have been retired a while. It's great.

    I find living on the pension quite easy, as I had no debts, & had put together what I would need, & live very simply. I have funded things like fridge, oven, & other appliances replacements fairly easily, along with home & car maintenance.

    I can see no need for pensions to increase, but think I am entitled to what we now get.

    I don't want to rip our kids off, just when they are trying to establish themselves, however, IF THE KIDS WANT TO CONTINUE USING ALL THE INFRASTRUCTURE WE OLDIES PAID FOR & BUILT, I think it is reasonable they make some contribution to those who built it.

    I feel perfectly entitled to hold my hand out for the small rent they pay for our infrastructure in the form of my pension.
    Retired Knowall
    6th Mar 2016
    Good on you hasbeen, well said.
    3rd Mar 2016
    Oh the "ME GENERATION" aren't they something else. I retired three years ago and had the misfortune of working with some of these in my latter years. What a joke they are. How did they become so arrogant and if you expected them to work hard think again. Quite frankly I am thrilled at the prospect of them having to work past 67 because their attitude deserves it.
    3rd Mar 2016
    I do wish people (and journalists) would stop talking as if 'retirement age' was mandated. It isn't! People can retire at any age they want. The only thing anyone has to consider is whether they have enough money to live on. If they do, good luck to them. If not then you keep working.

    The only age mandated is the age at which you can apply for an age pension from the Government. So all those people whining that they cannot retire 'early' or if ever, are really complaining about themselves and their lack of accountability in planning for their eventual 'retirement'. If they expect the Government (or rather the tax payer) to fund the lifestyle to which they clearly so want to be accustomed, they are in for a very rude awakening. Those now in their mid 40s will have had compulsory superannuation for practically all their working life. They have been told for years that relying on the employer contribution is not enough. Having failed to take heed, they now complain!
    Polly Esther
    3rd Mar 2016
    at last a sensible comment and so very true.
    Retired Knowall
    3rd Mar 2016
    Spot on KSS, well said, but now watch the "I worked hard all my life and deserve more" brigade come away from the trough and attack you for being arrogant and insensitive.
    Old Fella
    3rd Mar 2016
    Having retired at 65 and having now been retired for five years I must say it is and has been a great journey so far. The physical ageing process continues to be a sore point, however the life expectations and emotional needs have remained constant. The financial demands are more demanding, but strangely enough you are better equipped to 'cut your cloth accordingly.( New cloth is unavailable for most of us). I suspect _IF _ you truly appreciate being alive than most other challenges full in line. For me my family is my wealth and mainstay and they continue adding value to my being. I accept life dangles from a string , my only unanswered question is how long is that piece of string going to hold

    4th Mar 2016
    retirement is so eazy put it upto 1000 per forthnight for singles 1600 voor couples and every man or woman including us retirees pay 3% then their wil be always the money no more meanstesting etc and everyone gets the same is so in Holland and works very wel
    6th Mar 2016
    Fully agree with Lewi. Full pension to everyone, does away with all the bureaucracy and super is a top up on your pension.Tax the lot as normal no thresholds to worry about and close the loopholes. Catch all income where ever it comes from.
    Not Senile Yet!
    8th Mar 2016
    Australia invented a Aged Retirement Pension for ALL way back in 1908 as a "Reward for Service" without exception regardless of Wealth, Assets or Income!!!!
    It was enshrined in legislation and fully funded by a Separate Tax put aside from Normal Tax Income right up until the 1990's...then BOTH Parties led by Liberal PM Malcom Fraser.....raided the piggy bank.....never reduce the 7% tax put into the fund....but introduce Compulsory Super as an Alternative.
    Where did the Billions go you ask?????
    How was it that they built and paid for a New Parliament House not long after?????
    You go figure it out yourself.....but it often referred to as the Greatest Legal Heist in the History of OZ!!!
    Furthermore it has never ...ever...been explained to the Public......just what they did do with the Money kept in Reserve to pay for the Aged Pension due in the future!!!!
    That is why they can't afford to pay for the Age Pensions.....they spent the kitty that paid for 3/4 of the Pensions and thereby increased the amount needed annually by !00% by removing all future funding!!!!
    Not everyone believes their bull and crap propaganda about being broke and blaming previous overspending!!!
    They took every Australians Retirement Plans & Pensions and SPENT THE LOT!!!!!!