The Australian retirement age has been “steadily increasing” over the past two decades, but a plateau uncovered in the latest retirement data shows the nation’s ageing population have reached their limit for now.
Both men and women are now expected to retire at the oldest age on average since the early 1970s, accounting giant KPMG said.
The ageing workforce ballooned over COVID as increasing flexibility in certain industries incentivised “semi-retirement”, KPMG urban economist Terry Rawnsley said.
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“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,” he said.
Women are now expected to retire at an average age of 64.8, an increase of 3.2 years over the past two decades.
Men are now expected to retire at 66.2, an increase of 2.9 years over the past two decades.
“Even in a tight labour market, we may have reached a plateau in the expected age of retirement,” Rawnsley said.
While KPMG said an increased cost of living could also be a contributing factor in keeping people in the labour market for longer, the data shows the major increase in older workers remaining in, and re-entering, the workforce took place in 2021 and 2022.
“This predates the cost of living crisis of the past 12 month to 18 months,” according to KPMG.
The findings, based on labour force census data and monthly labour force survey averages, don’t just capture Australians ageing into the over-55 category, but also people coming out of retirement.
It suggests there was a surge of older workers returning to work, or staying in work, to fill labour shortages or kill lockdown boredom during COVID.
But KPMG said that the recent plateau suggests senior workforce growth will not continue.
“This is because we simply can’t find enough older workers to sustain the growth that occurred during the COVID era,” Rawnsley said.
Retiring later based on where you live
The number of Australians working past the age of 55 grew by 127,000 between 2019 and 2021 — making up 68.6 per cent of the total labour force growth that year.
The over-55 workforce in Australia grew by another 179,000 in 2022, and 223,000 in 2023.
Australians can only access their superannuation from the age of 55 and 60, depending on when they were born, and those eligible for the age pension can access the payment from the age of 65 to 67, depending on when they were born.
But the retirement age expectations are also influenced by where a person lives.
Women have the oldest retirement age expectancy in Greater Perth at 65.5, and the second-oldest retirement age expectancy in Greater Melbourne at 65.2.
Men, conversely, have the oldest retirement age in Greater Melbourne at 66.8, and the second oldest in Greater Perth at 66.5.
“The higher retirement ages reflect the tight labour markets in both those cities,” Rawnsley said.
Coastal areas such as the Gold Coast also showed lower retirement ages, which KPMG said could be linked to retiring Australians making a sea change as they enter their golden years and exit the workforce.