Have you been putting off retirement? You are not alone, a report from KPMG has found that Australian workers are continuing to retire at their oldest age since the early 1970s.
KPMG found that for 2022-23 the expected retirement age for men was 66.2 years, the highest since 1972 and the expected retirement age for women was 64.8 years, the highest since 1971.
The report stated the retirement age over the past two decades has been steadily increasing from 62.2 to 66.2 years for men and 61.6 to 64.8 years for women.
But what’s behind the reluctance to retire? KPMG puts it down to several factors unique to the times we live in, not least how work expectations changed after COVID.
“So these are people who might have normally retired but you had border closures which means they couldn’t travel the country or go overseas, they go, ‘Well, I can’t travel, there’s lots of jobs around, I’m going to keep on working,'” KPMG urban economist, Terry Rawnsley told the ABC.
“The adoption of working from home has made many older Australians in professional jobs realise that they could ‘semi-retire’ and continue to dabble in the workforce from home or even from a coastal location.”
According to KPMG, improved job flexibility and a tighter labour market mean highly educated Australians are staying in the workforce longer, filling vital gaps in the labour market as they do.
Between 2019 and 2021, the Australian labour force grew by 185,000 people, with those aged 55 and over representing almost 70 percent (127,000) of that increase. With the return of international migration and the growth in the under-55 labour force, the share of over-55s fell to 21.3 percent in 2023.
“Even in a tight labour market, we may have reached a plateau in the expected age of retirement, suggesting we cannot expect older workers to continue working longer. This is because we simply can’t find enough older workers to sustain the growth that occurred during the COVID-19 era.” Mr Rawnsley said.
“It’s much easier to keep working at a laptop in an office environment when you’re 60 or 67. It’s much more challenging to be sort of out on the construction site laying bricks or working in a physically demanding role in your 60s.
As the economy has shifted more and more to that white-collar environment that’s tended to drive up the age of retirement across time.
Labour market
Even 20 years ago the average retirement age for women was 61.6 and 63.3 for men, with the genders maintaining an average 1.5 year age gap.
“The labour market behaviours of men and women have become much more in line,” Mr Rawnsley said.
“[Previously] women could access the age pension at an earlier age than men, which drove a little bit of early retiring.
“But now those two numbers are in line, the behaviour of men and women will probably converge over the next few years.”
Where you live also plays a part. Perth had the highest retirement age for women at 65.5, and Melbourne had the highest age for men at 66.8. Brisbane was the lowest at 64.8 for women and 66.4 for men.
KPMG attributed this fluctuation to Melbourne and Perth’s tight labour market and population trends in Brisbane and Sydney where people were leaving those cities to move to regional areas.
Mr Rawnsley also said many people were dipping their toe into retirement and not liking it and returning to work, usually part-time.
He said there were a lot of positives to working longer, including decreasing some financial burdens.
“It’s more personal income for people which will delay or prevent the need for age pension, and it’s also just taking a burden off some of that, you know, younger age groups in terms of a tax burden because older workers are contributing to the tax base for longer,” he said.
Have you delayed retirement? Why not share your experience in the comments section below?
Also read: 10 signs you won’t run out of money in retirement
I’m a nurse approaching 74 and agree with above comment around not being able to travel and also going part time during covid and find I enjoy working and constantly interacting with the younger generation and imparting the benefits of knowledge and experience and also learning about their experiences around parenting today and helping them navigate and adjust to this changing parenting environment with return to work now to factor into this challenge
I will continue with part time work in nursing as have a mostly in office consultative role for as long as I enjoy this and feel employer supported in my continued reducing part time role.
I wonder too if the increase in overall retirement age has been contributed to by the government’s policy of increasing the age of access to the Age Pension. I’ve read that you must now be 67 or older (depending on where you are born) before you can apply. Would this not force our older, less financially secure citizens to stay employed for as long as possible?