Yahoo Finance Retirement age for Aussies pushed back to number not seen in 50 years
Older Australians are getting back into the workforce while they're still active as the amount of superannuation you need to retire reaches record highs.
The Australian retirement age has been pushed back to a number not seen in decades as many older people try to beat the cost of living and keep active. KPMG analysis found the average age of retirement for men is now 66.2 years and 64.8 years for women.
The last time the workforce saw Aussies working up to these ages was 1972 and 1971, respectively. The average ages for men and women to stop work 20 years ago was 61.6 and 63.3, respectively.
While John Scott retired at the end of 2021 after 50 years in the insurance industry, he decided to take up a job at Coles at the ripe age of 68. He told Yahoo Finance the benefits of working "far outweigh sitting at home".
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“Getting paid to do what I’m doing is a bit of a blessing. I didn’t do it for financial reasons, I just did it for my own mental health," he said.
Business owner Debbie Brown, 66, said older Aussies enjoy "the contact" that comes with continuing to work.
"I have staff who are older than me who just want to keep working...I'll go till I'm 80, I don't care," she told 7News.
They are two of thousands of Australians who are continuing to work or returning to work well into their 60s. Melbourne now leads the country for the oldest retirement age, with blokes hanging up their boots at 66.8 and women finishing up work at 65.2 years old.
COVID caused many to stay or jump back into work
The COVID pandemic saw many push back their retirement plans because borders were closed and they couldn't travel around the world, according to KMPG, while others decided to get back into a job once restrictions lifted after getting a taste of what life would be like without work.
The professional services firm said more than 127,000 Australians over the age of 55 rejoined the workforce between 2019 and 2022.
KPMG urban economist Terry Rawnsley said post-COVID working arrangements have also created a new space for Aussies to work for longer.
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“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,” Rawnsley said in a statement.
He added that Baby Boomers are bucking the trend set by their predecessors by setting up their own path to happiness.
"It's not like the old days where you'd hit 65 and they'd say, 'Here's your gold watch and see ya later'," he explained to 9News.
"It's much more of a nuanced transition. We see in the data the number of hours people are working starts to drop off . We start to be able to transition from full-time work to part-time work."
Rawnsley said Aussies retiring later has an added benefit on the economy as it sees fewer people jumping onto the aged pension.
Younger Aussies will likely have to wait even longer to retire than their older counterparts, with a Macquarie University study predicting the age to access the pension will increase to 68 by 2030, then again to 69 by 2036 and then 70 years old by 2050.
Sad reason some Aussies can't stop work
But it's not just the desire to be active and busy that's keeping older Australians in the workforce.
The cost of living crisis has also meant some wannabe retirees need to stay working for a little longer if they want to enjoy their later years.
A survey by National Seniors Australia found money was the top reason 60 per cent of pensioners and 46 per cent of non-pensioners decided to return to work.
“Many are going back to work because of those positive experiences but there are a number of them [who are] struggling and, in particular, those that are renting,” National Seniors CEO Chris Grice told Yahoo Finance.
“They are going back to work for a couple of days in order to try and supplement their income to help them meet the rising costs.”
How much superannuation do you need to retire?
The cost of living as well as insurance premiums have seen the amount of superannuation needed to retire these days reach record highs.
The Association of Superannuation Funds of Australia (ASFA) recently revealed a single retiree now needs $51,278 per year to have a comfortable retirement, while a couple needs $72,148 per year.
“Retiree budgets have been under substantial pressure for the past two years due to the high cost of essential goods and services,” ASFA CEO Mary Delahunty said.
“Fortunately, we are seeing [an easing in] price increases in the key categories that make up retiree budgets – home and contents insurance, fruit and vegetables, fuel and electricity.”
Increased insurance prices have been a big driver of rising retirement costs, with premiums up 16.2 per cent annually. Food and electricity prices also rose above inflation, up 4.5 and 6.9 per cent, respectively.
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