Retirement put on hold whilst people working longer

LONDON: Older people are looking to delay their retirement amid worries that spiralling living costs will cause their life savings to run dry.

A study of over-55s commissioned by AustralianSuper has found more than half are considering pushing back their retirement, four out of five have cut back on spending, and almost a third lack confidence that they will have enough money to pay for the lifestyle they want.

Workers say the financial factors expected to keep them at work longer include continually climbing living costs, a lack of savings, outstanding debts, and not enough money to cover health costs or support family members.

AustralianSuper head of advice Shane Hancock said the research found people aged between 55 and 64 were cutting back on luxury items and everyday essentials.

“One in three Australians aged 55 to 64 are not feeling confident they’ll be able to ­finance their ideal lifestyle in retirement so fear of running out is a concern for many,” Mr Hancock said.

AustralianSuper’s research found 53 per cent of workers aged over 55 were considering delaying retirement and 41 per cent were making extra super contributions.

Super funds could help people understand how much they would need in retirement, Mr Hancock said.

“Retirement is a very personal thing as everyone’s situation is different,” he said.

“Despite your age or stage of life, the sooner you start to look at your super, the sooner you can build savings, reduce debt and make educated and informed decisions around your financial future.”

Eric Farraro returned to part-time work to help subsidise his income following a forced retirement through redundancy at age 60, and now works as a handyman, TV extra and golf caddie.

“The main reasons are to be more active and to subside lifestyle activities I want to do,” Mr Farraro said. “I will keep working part-time as long as the body holds up. I am 66 this month and really enjoy staying active in retirement.

“Doing little jobs here and there means I have fun money to play with rather than dipping into savings.”

Lightbulb Wealth financial adviser Heinrich Jacobs said increasing life expectancies, inadequate savings, rising health­care costs and economic uncertainty were prompting more people to consider delaying retirement.

“By working longer, individuals can continue to save for retirement, delay tapping into their savings, increase their ­social security benefits, and ­potentially enjoy better health and social engagement,” Mr Jacobs said.

“However, it may not be suitable for everyone, as health issues or job-related challenges may limit the ability to work longer.”

Mr Jacobs said many over-55s might not realise how the age pension could work in partnership with their savings.

“Some may underestimate the importance of the age pension in providing a basic income in retirement and may not be aware of how it can supplement their super savings,” he said.

Mr Jacobs said people worried they might have to delay retirement could:

REVIEW and adjust their current retirement savings plan;

CONSIDER part-time or flexible work options to ease the transition into retirement;

EXAMINE their expenses and areas that could be cut back to save more; and

SEEK professional advice to create a retirement plan.