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Retirement by 70 a fading hope for many

  • Tim Colebatch
  • February 25, 2009

 

 

MORE than a third of older Australian workers now plan to work until they are at least 70, in an astonishing cultural change, the Bureau of Statistics reports.

A bureau survey taken in mid-2007, but released yesterday, reports that 15 per cent of Australian workers aged 45 and over say they don’t plan to retire, but just keep working until they drop. Most intend to ease down to part-time work. But, overall, less than 30 per cent of middle-aged and older Australians now intend to retire before they turn 65.

If this eventuates, it will transform the Australian workforce and concepts of retirement. The bureau found people already retired, on average, did so aged just 52 (58 for men, 47 for women).

That change is now under way. Bureau figures show that in November, 60 per cent of men aged 60 to 64 were still in the workforce — as were 29 per cent of men aged 65 to 69 and 7 per cent of men 70 and over. Women are catching up: 39 per cent of those aged 60 to 64 are still at work, as are 15 per cent of those aged 65 to 69, and 2 per cent of the over-70s.

One reason people are working longer could be inadequate superannuation.

The bureau survey found that in mid-2007, the median superannuation balance reported by Australian workers was just $23,698. Even among workers aged 55 to 64, the median balance was just $71,731. Men average almost twice as much as women, and public servants almost twice as much as those in the private sector.

The mean or average superannuation balance was much higher, but only because some have very large superannuation assets. Only 20 per cent of men and 11 per cent of women said they had $100,000 or more in their super account.

Ross Clare, research director for the Association of Superannuation Funds of Australia, said the figures might be understated, but were consistent with other data showing that most Australians had inadequate super balances.

“In 30 years time they will be substantial, but the harsh reality is that most people don’t have a long history of superannuation, and if you’re on an average income, it takes a long period for assets to build up,” he said.

Mr Clare said that while the sharemarket crash had reduced superannuation assets, the deepest losses were borne by those with substantial balances, while the median balance had probably risen a little after two years of high employment.

ASFA estimates that under the present regime, someone working 30 years on average wages is likely to retire with a super nest egg of $180,000.

http://www.theage.com.au/national/retirement-by-70-a-fading-hope-for-many-20090224-8gvu.html

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