The shifting goal posts of the retirement age in Australia

It’s no secret that the goal posts on retirement age seem to be shifting further and further away for many.

Take a trip back 20 years and you’ll find that the retirement age in the 90s was 65 for men and 60 for women.

Back then (1996), just 25% of men were still working past the age of 65.

In fact, 36% of men were retiring between the ages of 51 and 59 and 35% were retiring between ages 60 and 64.

Women on the other hand were retiring even earlier, with only 4% working past age 65 (though that’s primarily because of marriage and parenting).

Fast forward to today – and well, sadly, you have to add a few years on top.

The pension age was 65 right up until present day.

In July 2017 it jumps up to 65.5, then to 66 in July 2019 – increasing by six months every two years until it hits age 67 in 2023.

That means, if you were born in January 1957 or later – you won’t be able to retire and receive a pension until you turn 67.

No doubt you’ve heard these stats before.

And it looks like that age could increase too.

There’s been plenty of talk about the government proposing to raise the retirement age t0 70 by the year 2035.

In fact, the 2014-15 budget proposed the increase in retirement age to 70 for 2035 – which would affect anybody turning 58 this year (those born in 1958 or later).

Ok so we are living longer and increasing the retirement age will give us longer to save for our retirement.

Just look at the statistics.

Baby Boomers can expect to live an average of 20 years longer.

If you’re 55, statistics show you’ll live on average another 31.02 years if you’re a woman and 27.71 if you’re a man.

If you’re 65, on average you can live for another 22.05 years if you’re a woman or 19.22 if you’re a man.

Most of us get that.

But if you’re like most older Australians, you’re probably asking why that should even be a reason for increasing the retirement age in the first place?

Most of us get the financial reasons for wanting to drop the pension.

After all, the cost of social security is skyrocketing in Australia.

But as Rafal Chomik from the Centre of Excellence in Population Ageing Research with UNSW writes the financial case is strong but there are number of equity concerns.

“To many, it seems unfair to delay retirement from laborious jobs, to expect older workers to cope with a labour market that discriminates and employers who don’t invest in their training, and to restrict the pension budget while ignoring the increase in regressive tax advantages of super,” he wrote. 

The shifting retirement age is not a problem unique to Australia.

In the UK the pension age sits at 65 for men and 63 for women.

The plan is for the age to be equal on 65 for both men and women by 2018.

And then, they’ll follow Australia’s lead.

The Telegraph shows that it’ll rise to 66 by 2020 and 67 between 2026 and 2028.

And beyond that, it looks like a rise to a retirement age of 68 could happen between 2036 and 2046 – and then even further to 69 by 2049.

In France, the retirement age will jump to 67 from 65 by 2023.

Over in Denmark, the retirement age is 65. But it will increase to 67 by 2022 and from 2030 it will go up one year every five years.

A number of European countries will lift their retirement age to 67 in the next decade including Germany, Poland, the Netherlands and Spain.

Across the ditch in New Zealand there’s no official retirement age – but the fortnightly New Zealand Superannuation payment starts at age 65.

So where does the buck stop?

Think about your kids and your grandkids.

Sure they’re going to live longer, but they’re going to have to work for a lot longer.

It’s likely your grandkids in particular will work until they’re at least 70.

Unless of course, the goal posts shift even further.

And that will make it even harder for them to prepare for retirement.

What do you think? Should we keep the retirement age where it is?