There is growing concern over health-care costs and world-wide economic issues at the moment, and retirees’ confidence in being able to afford a comfortable and financially secure retirement has declined to a very low level.
Some superannuation funds have recently reported their largest-ever drop in returns.
The Australian Government is publically encouraging workers to remain in the workforce after age 65. They have relaxed the superannuation and taxation rules to make it more attractive to older workers to keep working. Initially this was just to reduce the bill for the old-age pension which threatens to blow-out to enormous levels as the Baby-Boomer generation all retire together.
Then average life expectancies kept getting longer, so that people aged between 100 & 110 years old are the fastest growing category in Australian demographics. This means that it is possible for some people to be on the aged-pension for longer than they were in the workforce!
At the same time, declining birth-rates over the last 20 years has led to a severe skills-shortage in the workforce, and the government wants to minimise the effect upon business (and therefore on the economy) by encouraging older workers to stick around in their jobs awhile longer.
Now, with the American recession biting into world-asset values, many boomers may no longer have the luxury of choosing to retire at 65 – they won’t be able to afford not to keep working.