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WEEKLY E-MAIL

AUSTRALIAN RETIREMENT TRENDS

By Karen Maher

On 29 August 2023, the Australian Bureau of Statistics published its report on the retiree statistics and retirement plans of people aged 45 years and over during the 2020-21 Financial Year, the most recent reporting period for these collected statistics.

Within this specified timeframe;

  • Australian retirees numbered a total of 4.1 million
  • The average age at retirement (of all retirees) is 56.3 years
  • A total of 140,000 people retired in this reporting period, with an average retirement age of 64.3 years
  • The average age at which people now intend to retire is 65.5 years
  • The Age Pension is the main source of income for most retirees

Age Trends

Of the 140,000 people who retired in this reporting period, the average age at retirement was 64.3 years; however, for men, the average age was 65.4 years, and for women, the average was 63.7 years.

Income Sources

The primary income source for most retirees is still the Age Pension. The good news, however, is strong growth with retirees, particularly men, who now rely on superannuation as an income source. The Super Guarantee (SG) system, which was introduced in 1992, appears to be having the desired effect of making fewer individuals dependent on social support.

In addition, retirees with no personal income (i.e., those not receiving any government pension or superannuation income, relying on family members or partners, selling assets, or using savings) saw a drop, particularly among women, which is another encouraging sign.

State Variations

The geographical distribution of retirees showed:

  • Tasmania held the highest proportion of retirees (48.5% of individuals).
  • Queensland witnessed a substantial increase of 76,000 retirees, while Victoria experienced a minor decrease.
  • The Australian Capital Territory had the highest increase in the proportion of retirees (32% to 37%).

Retirement Intentions

The report indicates people are intending to retire at around 65.5 years. Approximately 670,000 individuals plan to retire within the next five years, with 220,000 expecting to retire within two years.

Conclusion

The retirement landscape is evolving, with changing age trends, gender dynamics, and income sources. These statistics provide valuable insights into the retirement choices of individuals and the impact of external factors like the COVID-19 pandemic on retirement decisions. These trends may continue to evolve as societal, economic, and personal factors continue to shape the retirement landscape. But the key takeouts are people are working longer and becoming less dependent on social security in retirement.

Karen Maher
Associate

If you have any questions or comments, please email me at karen@gfmwealth.com.au

Disclaimer: This document is not an offer or invitation to any person to buy or sell any interest in or deposit funds with any institution.  The information here is of a generic nature, and does not take into account your investment objectives or financial needs.  No person should act upon this information without firstly seeking competent, professional advice specifically relating to their own particular situation.

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