Why more Aussies are now working well into their 60s

In a notable shift, an increasing number of Australians are opting to extend their careers well into their 60s, marking the highest expected retirement age since the early 1970s.

Despite the challenges brought by the COVID-19 pandemic, both men and women are steadfastly holding onto their jobs, indicating a significant change in how older Australians approach work and retirement.

Data from 2022 and 2023 shows that men are now expected to retire at 66.2 years, a figure not seen since 1972. Similarly, for women, the expected retirement age has risen to 64.8 years, the highest since 1971.

The driving force behind this trend lies in the increasing opportunities and flexibility in knowledge-intensive roles, coupled with tighter labor market conditions, which have encouraged older Australians to prolong their careers.

Terry Rawnsley, an Urban Economist at KPMG, believes that the shift towards extended careers is partly due to the flexibility offered by remote work that rose to popularity during the pandemic.

“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,” Rawnsley explained.

This newfound flexibility has enabled older workers to strike a balance between work and leisure, prompting them to remain active in the workforce for longer.

Furthermore, the presence of older workers in the labor force during the COVID-19 era has played a crucial role in filling vital gaps, thereby prolonging the expected age of retirement. Between 2019 and 2021, the Australian labor force grew by 185,000 individuals, with those aged 55 and over constituting nearly 70 percent (127,000) of this increase.

Rawnsley highlights that while older workers are contributing significantly to the workforce, there may be limitations to how much longer they can sustain this trend.

“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.” Rawnsley said.

In the face of these shifting dynamics, one thing is clear: older Australians are redefining retirement, choosing to stay active in the workforce well into their 60s, shaping a new narrative for ageing and employment.