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Retiring later a double-edged sword for society

Retiring later a double-edged sword for society

Australians continue to increase their anticipated age of retirement, but the trend has positive and negative consequences, Roy Morgan has said.

According to its latest analysis, the average age of Aussies planning to retire in the next year is 61.9. That’s up from 58.2 in 2014.

However, while we are planning to retire later, the sheer volume of intending retirees continues to grow. It’s currently at 415,000, up from 392,000 in 2014 and 326,000 in 2008.

To Norman Morris, Roy Morgan’s industry communications director, this increase will have a number of impacts on the Australian workforce.

He explained, “Currently, the Australian government faces twin financial pressures on funding the age pension, from an increase in life expectancy and inadequate personal retirement savings. Given this situation, it is a positive finding in this research that there has been a gradual increase in the age of intending retirees.

“This results potentially in a longer period of paying tax, increased savings and as a result less time on the pension, possibly at a reduced level.”

At the same time, an older workforce could also mean less employment opportunities for younger workers, Mr Morris said.

He elaborated, “One drawback of delayed retirement is that it may increase unemployment, with older workers occupying positions that younger people might otherwise have filled.”

The average age of women planning to retire in the next year is increasing at a faster rate than their male counterparts, Roy Morgan also revealed.

While the average age of intending retirees increased from 57.5 in 2008 to 61.9 in 2017, the average intending age of female pre-retirees has grown from 55.5 in 2008 to 61.8 in 2017. That’s an increase of 6.3 years.

Over the same period, the intending age of Aussie men has increased by just 2.9 years, from 59.1 to 62.0

“This more rapid increase in retirement age for females is likely to be at least partly as a result of the increasing awareness that they generally have a lower level of retirement funding than males and as a result they need to work longer,” Roy Morgan said.

Mr Morris added that the faster increase in the age of female retirees intending to retire is a positive trend.

“This has now reached the stage where the intended age of retirement is almost identical for both sexes, enabling greater savings potential for females heading into retirement.”

Retiring later a double-edged sword for society
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