The Road to Retirement is Now Longer

By Josh Robertson, the Couriermail

October 8, 2008

Australia

Retirement at 65 has become an increasingly unaffordable option for many older Australians with nearly one in four planning to work beyond 70.

Shrinking superannuation nest-eggs – and the unattractiveness of aged pensions while consumer price inflation still runs at 4.5 per cent – are conspiring to force many already in their 60s to delay their exit from the workforce.

Recruitment firm Mercer's survey of 600 respondents found 43 per cent of those over 50 were unsure how much they would need in retirement. Just under a quarter planned to work into their seventh decade.

Carolyn Steinheuer, a 61-year-old who has been in the workforce since 16, and her husband are both resigned to this.

While both enjoy their jobs – she as an accounts clerk and he a sales area manager – it is less a choice than a necessity, as the couple are the primary carers of two teenage grandchildren.

"Even though we've got a reasonable superannuation, whilst they're still with us and at the ages of 14 and 16, there's absolutely no way in the world we can live off a pension and support those two kids," Mrs Steinheuer said.

Two decades of super contributions, including their own voluntary payments, had until recently set the couple up for a reasonable retirement without government support, Mrs Steinheuer said. But the sharemarket plunge, which is set to strip 12 per cent of the value of the average super fund in 2008, helped change all that.

National Seniors chairman Everald Compton said Australia had to face the fact that retirement at 65 or earlier was not economically sustainable for the population.

"We've been saying that older people are entitled to the good life and we want to give it to them but that presumes that the nation and the world is able to afford that to happen," he said.

"The current financial crisis is simply a way of telling us we're living beyond our means and people need to work longer because we've got a falling birth rate and older people living a heck of a lot longer."

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