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Flexible work is changing the way Australians are planning their retirement – including how long they’ll stay in the workforce and where they’ll live during their final working years.
According to new research from KPMG, Australia may have just reached its new standard for retirement, with the average age for finishing work rising among men and women, but not expected to climb any higher.
Currently, workers in the country are retiring at their oldest age since the early 1970s. The expected retirement age for men is now 66.2 years, the highest since 1972, while for women it sits at 64.8 years, the highest since 1971.
The expected retirement age for both men and women has remained unchanged over the last two years, suggesting that shifts brought about by the pandemic enacted a permanent change to labour market dynamics.
Much of that is related to the new-found flexibility in work location as well as hours, which has expanded options for older Australians as they consider how to make the transition.
“The adoption of working from home has made many older Australians in professional jobs realise that they could ‘semi-retire’ and continue to dabble in the workforce from home or even from a coastal location,” explained KPMG urban economist, Terry Rawnsley.
The firm observed that workers remained in the labour force during COVID-19, which served to increase the expected age of retirement and fill vital gaps in the Australian labour market.
Between 2019 and 2021 – at a time when many temporary migrants left the country and entry was severely curtailed due to lockdown restrictions – the Australian labour force actually grew by 185,000 people. Those aged 55 and over represented almost 70 per cent of that increase.
In 2023, as migration returned to normal levels, the share of over-55s contributing to labour force growth fell to 21.3 per cent.
According to Rawnsley, what this shows is that while COVID-19 pushed the retirement age higher, the nation has now reached a new normal.
“Even in a tight labour market, we may have reached a plateau in the expected age of retirement, suggesting we cannot expect older workers to continue working longer. This is because we simply can’t find enough older workers to sustain the growth that occurred during the COVID-19 era,” he said.
As long as remote and flexible work remains on the table, it seems that the retirement age will stay at his peak, with Australians enjoying the option of easing into retirement with part-time work or a shift in location, allowing for downsizing and rightsizing to happen in conjunction with the later years of a worker’s career.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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