It seems Australians are putting off their retirement.
The retirement age is slowly creeping up, but what are the implications for retirees?
KPMG demographics and urban economics director Terry Rawnsley says demographers, policy makers and economists are increasingly concerned about the ageing population.
“This will have significant impacts on the labour force, consumption patterns and public finances and, in turn, on economic growth,” Mr Rawnsley said.
Projected figures in the data set show that in 2020-21, men aged 45 were expected to retire at age 65.2 and women are expected to retire at almost one year earlier at 64.3. Between 2000 and 2021, the retirement age has increased by 2.6 years for women and by two years for men.
Mr Rawnsley said the increase in retirement age is being driven by a range of factors including a shift away from more physically demanding jobs, changing attitudes towards older workers, more older people working part-time jobs and a strong labour market.
“The data for men over the past two years has shown a small increase in the expected retirement age,” Mr Rawnsley said.
“This is likely related to a strong labour market due to closed borders limiting skilled migration which encouraged older men to remain in the labour force for longer.
“Given the adverse impact of COVID-19 on female-dominated industries [retail, travel and hospitality], the increase in the expected retirement age was not as noticeable as it was for men.”
Previously, women in Sydney, Melbourne and Brisbane had retired later than their counterparts in Adelaide and Perth, a trend Mr Rawnsley attributes to the cost of living in major cities.
However, over the past two years the retirement age in the major capital cities has started to converge.
“This convergence is more noticeable for the expected retirement age of men, with increases in Sydney, Brisbane and Adelaide and small falls in Melbourne and Perth,” Mr Rawnsley said.
“These movements reflect different economic trends in those cities, with a strong labour market in Sydney during 2020-21 and a weaker labour market in Melbourne due to lockdowns.”
Mr Rawnsley said the results had implications for both individual finances and government spending.
“An increasing age of retirement indicates that businesses will be able to access skilled labour for longer, although the data suggests that older workers would prefer to work part-time,” he said.
“This presents an opportunity for both workers and businesses to come together to retain skilled workers and provide older people with income, social interaction and intellectual stimulation.”
Mr Rawnsley said the trend for older people to move to regional areas had created planning issues as an influx of new residents often priced locals out of the market.
“This can be addressed by strategic land use and infrastructure planning to take advantage of a growing population,” he said.
“Aged care and health service providers will also have to plan and build capability to deal with the increasing demands of a large and older population.”
Are you putting off retirement? We’d love to hear why in the comments section below.
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