People are working for longer but they are choosing to do it part time, Daniel Hoy writes
LIVING longer and the need for a greater income in retirement is causing more workers aged over 65 years to stay in or re-enter the workforce.
There has been a significant increase in the past five years in the number of mature-age people, aged 45 years and over, who are in work.
About 4.3 million workers were mature-age in 2011, compared to 3.8 million in 2007.
It is partly a consequence of the ageing population but notable is growth in the 65 years and over age bracket, in which Australian Bureau of Statistics figures show full-time employment increased by 55 per cent and part-time work grew by 60 per cent from February 2007 to February 2012.
There are more part-time workers (194,000) aged 65 years and over than full-time staff (164,000), compared to the total workforce average of 29 per cent. Since 2007, the proportion of people aged 65 years and over who are employed has grown from 8 per cent to 11 per cent.
The number of people aged 60 years and over is also at a record high, with 200,000 more people in work than in 2007, or 626,000 workers, with about one-third moving to retirement in part-time work.
The trend is attributed to today’s generation in their golden years generally being healthier, more active and so are living longer than their predecessors, with greater inclination to work and needing more money to last through their retirement. It also reflects the recent economic downturn, which has required older workers to look at how to supplement their retirement income.
Experts warn, however, they must be careful that working helps, rather than hinders, them financially.
‘‘ The challenging economic conditions in recent times has impacted negatively on the superannuation of Australian retirees,’’ Prescott Securities principal and financial adviser Ben Prisk says.
‘‘ Many are now seeking to go back to work part time or on a casual basis to boost their retirement income and fund their lifestyle.
‘‘ From a financial perspective there is a range of related issues that will need to be considered to ensure you’re optimising your wealth position.’’
While the financial repercussions must be examined by retirees returning to the workforce, the financial benefits for the business they are joining can be immense.
‘‘ Research shows a mature worker is often more reliable than a younger worker,’’ careers coach Warren Frehse says. ‘‘ They offer so much experience.
‘‘ Some businesses are happier to offer employment to older workers as they are able to relate better to their cus- tomers, especially where their customer base is of a similar age profile.
‘‘ Older customers prefer to deal with people who understand their needs better.’’
For some retirees, there will be the option of earning a certain level of income while remaining eligible to receive part of the age pension.
For others there are strategies available, such as creating a transition to retirement income streams that allow you to access some of your super as well as generating additional income in a taxeffective way. Prisk says eligibility for the age pension required satisfying the Income and Asset Tests.