Australia’s retirement landscape is shifting. With the expected retirement age rising and financial pressures mounting, more Australians are staying in the workforce well into their 70s. Recent data shows over 250,000 Aussies are now working past 70, sparking warnings from experts about the importance of early retirement planning.
This guide explores the reasons behind the trend, strategies to retire comfortably, and how much money you actually need to enjoy your golden years.
Retirement Age on the Rise
KPMG analysis shows the expected retirement age has climbed significantly:
- Men: 67 years
- Women: 65.3 years
Over the past 20 years, the proportion of 70-year-old men working has increased from one in ten to one in four, highlighting a structural shift in retirement patterns.
Why Are People Working Longer?
Financial adviser Gareth Croy explains there are two main reasons:
- Choice: Some retirees enjoy the fulfillment and social engagement that work provides.
- Necessity: Others are forced to work longer due to insufficient savings, rising property prices, or cost-of-living pressures.
Croy warns that delaying retirement planning can lead to serious financial stress later in life.
Financial Pressures Affecting Retirement
Several factors are contributing to Australians working longer:
- Rising property prices: Home ownership has become more expensive, requiring more years to pay off mortgages.
- Cost-of-living increases: Inflation, utilities, and healthcare costs put pressure on retirement savings.
- Changes in age pension eligibility: The age for full pension eligibility has increased from 65 to 67, delaying access to government support.
KPMG also identifies a growing cohort of “ageless workers”—older Australians who continue working beyond retirement age, either by choice or necessity.
Planning Your Retirement Strategy
Croy emphasizes the importance of early planning:
- Start retirement planning in your 30s or 40s to avoid last-minute pressure
- Pay off major debts, like your mortgage, before retirement
- Review superannuation and investments to ensure your risk profile and life stage are aligned
- Consider professional financial advice to optimize portfolios and growth strategies
“If you wait until 60 to plan for a 65 retirement, you’re putting yourself under tremendous pressure,” Croy warns.
How Much Money Do You Need to Retire?
The Association of Superannuation Funds of Australia (ASFA) provides benchmarks for a comfortable retirement:
| Household Type | Annual Income Needed |
|---|---|
| Single | $53,289 |
| Couple | $75,319 |
These estimates assume homeownership and partial age pension support. Your personal requirements may vary depending on lifestyle goals, such as travel or hobbies.
Croy recommends calculating your current household income and savings capacity to estimate the retirement income needed. Consider future expenses, desired lifestyle, and any potential gaps in funding.
Quick Tips to Retire Comfortably
- Start saving and investing early, even small amounts compound over time
- Reduce high-interest debt before retirement
- Diversify investments and review superannuation regularly
- Factor in healthcare, travel, and lifestyle goals in your budget
- Use retirement calculators to model different scenarios
FAQs
Q1: Why are Australians working into their 70s?
Financial necessity, rising living costs, and delayed pension access.
Q2: What is the expected retirement age in Australia?
Men: 67, Women: 65.3.
Q3: How much do singles need annually for a comfortable retirement?
Around $53,289, assuming home ownership and partial pension.
Q4: Should I seek professional advice for retirement planning?
Yes, especially for superannuation, investment strategy, and risk management.
Q5: What is an “ageless worker”?
Someone who chooses to stay in the workforce beyond traditional retirement age.
Conclusion
With Australians increasingly working into their 70s, the message is clear: retirement planning can’t wait. Starting early, managing debt, optimizing superannuation, and setting realistic lifestyle goals can help ensure you retire comfortably—without the stress of being forced to work longer than desired.
Retirement is not just about money; it’s about the freedom to enjoy your life on your terms. Start planning today to make that vision a reality.