Attitudes towards retirement are changing with the majority of Australians planning to continue working beyond retirement age, according to a new national survey.
Just published by Colonial First State (CFS), the Rethinking Retirement report canvassed the views of 2,247 Australians, including 430 current retirees, on a range of subjects.
One of them was work.
"It is … clear that attitudes towards retirement are shifting," says CFS Superannuation CEO Kelly Power. "Less than a third plan to stop working completely once they reach the retirement age."
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When is the retirement age?
The retirement age in Australia varies but for those born after 1 January 1957, it's 67 years old.
Ms Power said the way people think about their retirement timeline is changing, with the retirement age holding less relevance in people's choices today.
The report shows seven out of eight survey respondents believe they should be able to work for as long as they think is necessary.
Ms Power commented:
The traditional idea of retirement as a point in time or a specific date when we stop working is becoming less prevalent.
Why continue working?
While some Australians will continue to work to supplement their superannuation and pension, others will do so for lifestyle reasons like mental stimulation, purpose, and social interaction.
To determine whether you will need to work, Australia's official Retirement Standard provides some guidelines as to how much Australians need in superannuation to fund their lives in later years.
For a comfortable lifestyle, Australian couples aged 65 to 84 years need $690,000 in superannuation by retirement age, plus a part-pension, to fund annual living expenses of $72,000.
Single retirees aged 65 to 84 years need $595,000 in superannuation, plus a part-pension, to cover anticipated retirement living expenses of $51,000 per year.
For a modest lifestyle, couples and singles need $100,000 in superannuation and a part-pension to cover annual living expenses of $46,944 for couples and $32,666 for singles.
The Retirement Standard's estimates assume you own your own home outright and will draw down all your super capital, invest it, and receive a 6% annual return.
Eligible Australians can access the age pension once they reach their retirement age.
How do retirees want to work?
Most Australians would like the freedom to work as they choose, with 15% wanting to keep working just as much after they reach retirement age as they did before, the report finds.
A further 18% would like to continue working in the same role but reduce their working hours.
A total of 34% would like to change the type or frequency of the work they do.
This includes 14% wanting to pursue a passion project, which would involve fewer hours and less pay.
Ten percent would like to dip in and out of work when it suits their schedules, and another 10% would like to switch to less demanding roles.
According to the report:
Our research found that only 1% plan to study or retrain. This presents an interesting challenge for policymakers in considering how older Australians can assist with labour force gaps and skills shortages.
Ms Power said seeking professional financial advice ahead of retirement was important, especially for those who plan to continue working.
Power said:
Those looking to work beyond the age of 67 need to consider the tax implications and how their choices could impact their eligibility for the Age Pension.
Planning early and seeking advice will put you in a better position to retire with confidence.
