Educated Aussies are choosing to work longer

The analysis revealed that the expected retirement age for men was 66.2, the highest since 1972, while the expected retirement age for women was 64.8, the highest since 1971.

Over the past 20 years, the retirement age for men has lifted from 63.2 to 66.2. For women, the retirement age has lifted from 61.7 to 64.8 over the last two decades.

“Strong labour market conditions are helping to retain older workers in jobs for longer,” said KPMG economist Terry Rawnsley.  

Mr Rawnsley said rather than the Great Resignation, the pandemic had triggered the Great Unretirement, with Australia’s workforce adding nearly 537,000 additional workers between 2019 and 2022 — 179,000 of those were over the age of 55.

The report also revealed that since the onset of the pandemic, women were more drawn into full-time employment with the age of retirement from full-time work increasing. Meanwhile, the increased retirement age for men during the period was driven by increases in part-time employment.

“Over the last 30 years, we’ve seen a shift towards service-based jobs and away from more physically demanding jobs,” Mr Rawnsley said.

Highly educated Aussies are driving the trend into later retirement, due to improved job flexibility in ‘knowledge intensive’ jobs, as well as the tighter labour market.

In 2022 Australian workers holding a postgraduate degree tended to retire much later than the rest of the labour force, at over 67 years. Those with a bachelor’s degree, which includes typically less-flexible professions such as teaching and nursing, had an expected retirement age of around 66.

Workers who have completed year 10 and above were expected to retire at just over 65 years.

“The lockdowns during the pandemic made many older Australians in professional jobs realise that they could ‘semi-retire’ and continue to dabble in the workforce from home or even from down at the coast,” Mr Rawnsley said.

“And in what is a tight labour market, given the lack of international migration in recent years, employers have obliged.”

The tendency to retire later in life has played out pointedly in Sydney, where some of the highest increases in the age of retirement since the onset of the pandemic were recorded. 

A slowdown or reversal in that trend nationally is unlikely to occur anytime soon with tight labour market conditions expected to continue, at least in the near term, Mr Rawnsley said.

“On top of that, our economy is slowly becoming more and more educated, which is likely to shift the age of retirement for the whole labour force,” he said.

Data from the Australian Bureau of Statistics showed that around 40 per cent of recently retired Australians said their retirement was a result of them reaching the eligible age for their superannuation/pension, while around 60 per cent of people retired for other reasons.

“Cost of living is not typically a major factor in whether or not to retire,” Mr Rawnsley said.

“The recent increase in the age of retirement predates the pickup in inflation during 2022.”