We'll just have to keep working for longer

The Australian Bureau of Statistics estimates men aged 65 now can expect to live 19 years more and women aged 65 a further 22 years. Over the past 10 years, life expectancy at birth has improved by 2.5 years for males and 1.7 years for females. Australians' life expectancy continues to be among the highest in the world. It is a little lower than the world leader, Japan, but higher than Canada, New Zealand, the UK and the United States.

However, the Actuaries Institute's calculations show we will be living for longer than the ABS estimates. The institute estimates 65-year-old men can expect to live, on average, a further 21 years and 65-year-old women a further 24 years - two years longer than the ABS estimates. Of course, these are only estimates. Actuaries estimate future improvements to life expectancy by looking at how fast life expectancy has improved over past years. That is all of the data we have.

As the institute points out, these are average figures and some people will live much longer. In fact, the institute estimates that one in three of those who are 65 now will live past 90 and one in five will live past 95. However, with rapid advances in medicine and likely continuing rapid improvements in life expectancy, it is quite conceivable that in the coming years half of all 65-year-olds will live to beyond 100, says John Newman, the president of the Actuaries Institute. "Most people don't realise how long they might live," Newman says.

"Understandably, many people base their retirement plans on the published life expectancies," he says. Those relying only on Australian Bureau of Statistics averages are likely to run out of money, he says. So what is the answer to the problem of outliving our savings. In a nutshell, it is to work for longer. Perhaps this is already happening, but it is not yet showing up in the official data. ABS data released in December 2011 and cited by the institute showed the average retirement age of those who retired in the past five years was 61. The average age at which most people said they intended to retire was 63.

According to another set of ABS statistics about 40 per cent of older workers expect to wind back their hours for several years before eventually retiring, while another 13 per cent intend to never retire but just keep working - at least part time. Attitudes to taking early retirement, which is what I would call retiring at age 61, are going to have to change. But there are barriers to mature age employment.

In a report on the barriers to mature age employment, released in August 2012 by the National Seniors Productive Ageing Centre, one of the biggest barriers is age discrimination. The report found that terms such as "being unable to fit into the current work team, being overqualified, lacking up-to-date skills, being inflexible, slow or unwilling to learn, or concerns about health and fitness" are often just euphemisms for what is really age discrimination.

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Watch John Collett and Clancy Yeates discuss the impact of increasing longevity at

theage.com.au/money