We'll just have to keep working for longer
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
Frequently Asked Questions about this Article…
According to the Australian Bureau of Statistics, men aged 65 can expect to live an additional 19 years, while women can expect 22 more years. However, the Actuaries Institute suggests these figures might be underestimated, predicting 21 more years for men and 24 for women.
With increasing life expectancy, many Australians might outlive their savings if they retire too early. Working longer can help ensure financial stability throughout a longer retirement period.
Recent data shows that the average retirement age for Australians is 61, with many planning to retire at 63. However, a significant number of older workers are considering reducing their hours or continuing part-time work instead of fully retiring.
Mature age workers often face age discrimination, which can manifest as concerns about fitting into teams, being overqualified, or lacking up-to-date skills. These issues can hinder their employment opportunities.
Australia's life expectancy is among the highest in the world, slightly lower than Japan but higher than countries like Canada, New Zealand, the UK, and the United States.
According to statistics, about 13% of older Australian workers intend to never fully retire, opting instead to continue working at least part-time.
As life expectancy continues to improve, retirement planning needs to account for potentially longer lifespans. This means saving more or working longer to ensure financial security in later years.
Age discrimination can prevent older workers from securing employment, as they may be unfairly judged on perceived inflexibility, outdated skills, or health concerns, rather than their actual capabilities.
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