The financial and health benefits of working into retirement

It’s a fact Aussies are living longer and this is seeing them stay in the workforce longer – sometimes voluntarily, sometimes not.

The decision to keep working into what has traditionally been your retirement years is more than just financial. There’s an abundance of research showing continuing to work later life has lots of benefits for both your physical and mental health as well.

Who’s still working after age 55?

The latest figures from the Australian Bureau of Statistics (ABS) show there were 3.9 million retirees in Australia in 2018–19, with 55% of all people age 55 and over retired. This was up from 53% in 2016–17.

In 2018–19, half a million Aussies who were not yet retired told the ABS they intended to leave the workforce and retire within five years.

According to the final report from the government’s 2020 Retirement Income Review, the average age of retirement in Australia is currently around age 62–65, with women tending to retire one to three years before men. However, many people are choosing to stay in the workforce to older ages.

Retirement is not a one-way street either, with some people deciding they want to return to work after retiring.

According to ABS data, the main reasons Aussies decide to leave retirement and go back into full or part-time employment are financial necessity and boredom. The statistics show 35.2% of people come out of retirement due to financial need, 34.8% cite boredom and needing something to do, while 14% say an interesting opportunity came up.

Will you ever retire?

Compared to other countries, the mature age (55–64 year old) labour force participation rate of Australians (64.6%) is above average for countries tracked by the OECD. However, our rate of older workers is well below similar developed countries such as Germany (71.4%), New Zealand (76.9), Japan (77%) and Sweden (78.4%). These countries all have higher percentages of older workers remaining in their workforce. The US (61%) and Canada (64.6%) have a lower percentage of older workers.