If you’re in your thirties or forties today, there’s a good chance your life looks pretty different to that of your parents at the same age.
We’re doing everything later; from moving out of home to getting married and buying our first home, the age at which we’re doing these things is shifting.
This means retirement and how we think about it is changing, too.
1. We’ll keep working past retirement age
Less than a third of Australians plan to stop working beyond retirement age (1). Research from CFS found that the most popular work preferences beyond retirement age are working fewer hours, working the same hours, and pursuing a passion project with less pay and fewer hours.
While there is no official retirement age in Australia currently, if you were born from 1 July 1964 you cannot access your Superannuation until you are 60. This is different to the age you can access the Age Pension (if eligible) which is currently 67 if you were born on January 1957 or later. In 2022, the average age at retirement was just 56.9 years (2), but we can reasonably expect this number to rise.
2. More of us will be paying off our mortgages into retirement
Over the last three decades, ownership rates for households aged 30–34 have declined substantially. 65% of people born in the mid-to-late 1950s were homeowners by age 30–34. For people born in the mid-to-late 1980s, that number is 45% (3). And with house prices showing no signs of significant slowdown or a real wage growth on the horizon, it’s likely this number will continue to decrease.
If we are getting on the ladder later in life, those mortgage payments will still be due as we head into or even enter retirement. 38% of Gen X (age 43-57) intend to keep paying their mortgage through retirement, and 18% would consider selling their home and using the proceeds to repay their mortgage (4). Currently, 8% of retirees are still paying off their home loan (5).
3. We may have to fund more years of retirement
Despite many of us planning on working later, it doesn’t always work out that way. Two in three Australians do not retire at a time of their choosing due to their or a partner’s poor health or redundancy (6).
The life expectancy of a 65-year-old now is 85.2 years for men and 87.8 years for women (7). That number is likely to continue its trend upward, meaning we could end up funding many more years of retirement than planned.
Get confident about your retirement
Whether you’re in your forties or fifties, it’s never too early to start planning for your ideal retirement and financial advice can be especially helpful at this stage of life.
Research shows retirees who have sought advice are:
- More confident and significantly more positive about their financial position.
- Are less likely to find retirement harder than they expected.
- Are more likely to enjoy retirement (8).
Begin with the free Retirement Check-Up from moneyGPS, a digital financial adviser.
Spend 15 minutes completing a questionnaire and receive a free personalised and factual report detailing your financial health and position as you look towards retirement.
It also tells you what opportunities you have, and if there are any issues, it shows you how to resolve them. The Retirement Check-Up comes with the option to speak with a qualified financial coach who can go through the report with you and answer any questions.
If you haven’t set up your free moneyGPS account yet, you can do it here. It only takes a few minutes. This service is offered in partnership with your Accountant or Financial Adviser.
accountantsGPS and moneyGPS are owned by Fiduciary Financial Services (AFSL: 247344) ABN: 76 003 624 888
