Australians are retiring early

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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?

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36 Comments

Total Comments: 36
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    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…

  2. 0
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    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.

  3. 0
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    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.

  4. 0
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    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.

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      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.

  5. 0
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    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.

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    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.

  7. 0
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    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.

  8. 0
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    ….”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.

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      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.

  9. 0
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    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.

  10. 0
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    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.

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      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

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