Working past retirement age: for Generation X, putting the feet up seems a distant dream

Hard at work

There’s always a moment when you know you have reached a certain age: it may be the fact that your kids are now in a school year that you can remember with alarming clarity; it may be that when you fill in an online survey you find yourself ticking the age bracket box that no longer starts with a three.

For me, it was realising that the latest series of the ABS’s retirement intention survey includes those who where just 22 when Nirvana released Nevermind. The 45-year olds in 2014-15 are those who are smack bang in the middle of the Gen X era. They’ve gone from grunge and screaming out the chorus of Killing in the Name at 21st birthday parties to realising, as they sit on their couch catching up on episodes of Game of Thrones, that they are going to work till they die.

Well at least it might feel that way.

The latest data on retirement intention reveals that Generation X are intending to work longer than any generation before it. One in five workers aged 45-49 intend to work beyond 70 years of age – up from the mere 5% of that age bracket in 2004-05.

In the May 2014 budget the then Treasurer Joe Hockey announced that the retirement age would be raised to 70 years by 2035 – rather nicely only affecting those who were born after 1965, thus missing the baby boomer generation and hitting their Gen X children.

The policy was one of the many from that budget that failed to get through parliament – and the Department of Human Services page still has the measure “subject to passage of legislation”.

But regardless, those born after 1965 are already resigning themselves to the need to work at least till that age – and beyond.

The increase is not merely limited to the Gen Xers. Those aged 55-59 also saw a jump in the numbers of those intending to work well past the current retirement age.

One of the biggest concerns regarding increasing the retirement age to 70 is that while such an age may be fine for some workers, many – especially those who perform manual labour – would be physically unable to work at that age. Certainly the figures suggest that for those who do intend to work until that age, the physical ability to do so is a major factor.

Thirty six percent of those over 45 who intend to work beyond 70 years of age cite personal health and physical abilities as the major reason for their decision to do so. Overall however the major factor that determines the age at which people will retire is financial security:

The figures also show that, as a rule, women intend to retire earlier:

Women are also more likely to intend working till retirement with their current employer.

Of the 1.87m people over 45 who intend to retire and know whether they will work full or part time until they retire (some 624,000 don’t know), 81% of women intend to either work full or part time with their current employer. By contrast 74% of men intend to do so:

But while the most common intention is to stay working full-time, 13% of both men and women who intend to stay with their current employer also hope to reduce their duties and/or responsibilities, and 39% of those who intend to change employers hope to reduce their responsibilities.

Six percent of those who intend staying with their current employer intend to work more from home, compared to 20% of those who intend to change employers – suggesting that as the population ages, being able to offer more flexible working arrangements will be a key towards staff retention.

And staff retention is going to be a major concern as the changing demographic continues to see a greater proportion of those over the age of 65 within the labour force.

Back in 2004, when only 5% of those aged 45-49 thought they would work till 70, a mere 6.5% of those over 65 years of age were in the labour force – now it is close to 13%:

This proportion is unlikely to fall – especially as the increase in the retirement age to 67 only begins to take effect from July next year.

As the proportion of workers aged closer to the retirement age continues to grow, employers will need to adjust their work practices to keep valuable staff and to adapt to the realities of the demographics.

But while the results of the survey would appear to suggest that retirement has become but a dream, it remains a goal for the vast majority of workers.

In 2014-15 only 20.6% of workers either did not intend to retire or did not know whether they would retire – down from 20.9% in 2012-13:

Gen Xers and those getting ever closer to the retirement age may have resigned themselves to having to working longer, but they remain as hopeful as any who came before them that the day when they can put their feet up will arrive.

Powered by Guardian.co.ukThis article was written by Greg Jericho, for theguardian.com on Monday 4th April 2016 02.07 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

JefferiesAnd the Best Place to Work in the global financial markets 2016 is...

Register for Financial Markets News Alerts