Baby boomers are delaying retirement
Whether you’re counting down the days till retirement or still on the fence as to when the big day will be, chances are good you’ve spent plenty of time thinking about how you’ll manage financially once you’re no longer clocking up the weekly hours. With the rising cost of living, more and more baby boomers are choosing to extend their working life with a 10 per cent jump from 2008 (45 per cent) to 2015 (55 per cent) of 60 to 64 years olds remaining in full and part time employment. The over-65s still in employment has also grown.
While cost of living is one factor, the other is thought to be the surprisingly big impact remaining in the work force for a couple of extra years has on retirement income, even for those working part time or in a job share situation.
Working for longer boosts retirement income in two ways:
- It allows you to save a larger overall sum of money i.e. by giving you the capability to contribute more to your super.
- It spreads the spending of your savings over lesser years in total.
A hypothetical example compares someone retiring at 60 versus the same person retiring at 62. With average super savings, retiring at 60 would lead to an income stream of about $32,000 a year. Working two extra years increases this to around $34,600.
While not everyone wants to or physically can work longer, it’s something worth considering if you’re still enjoying your work and are capable of continuing, even on a part time basis, for a little while longer.