The ABS conducts a Retirement and Retirement Intentions survey every two years, with the last one completed in 2018-191. The survey conducted about 8,000 personal interviews and telephone calls with selected persons aged 45-year-olds and above.
Key insights from the survey:
- 74% of those yet to retire intend to retire from the workforce after reaching age 65.
- In the last five years, the average age of retirement was 63 (three years before Age Pension age).
- In 2018-19 the top three reasons retirees left their last job were:
- reached retirement age or eligible for superannuation (46%);
- sickness, injury or disability (21%); and
- retrenched, dismissed or no work available (11%)
- Between 2016-17 and 2018-19, the government pension was the main source of income at the start of retirement for 46% of retirees;
- Superannuation was the main source of income for 23% of retirees.
Whilst clients can plan their retirement based on their current goals and objectives, sometimes things that are out of their control can affect their actual retirement date. At least a third of retirees in 2018/19 were forced into retirement due to illness or redundancy, before we consider other reasons such as retiring to care for grandchildren or other loves ones. The number of clients forced into retirement may be even higher in the current COVID-19 environment.
Clients who have retired earlier than expected may need to rely more heavily on other sources to fund retirement until they can access the Age Pension or even their superannuation savings. These could include:
- using personal savings to invest in a term income stream to meet income goals until Age Pension age or preservation age;
- using personal savings to invest in an immediate lifetime income stream;
- income from managed fund and/or investment property portfolio;
- capital drawdown from assets;
- commencing or increasing drawdowns from account-based pensions (where they have reached preservation age); or
- a combination of the above.