I saw a graph at the SPAA conference earlier this year that made my jaw drop. It represented the number of Australians over age 65. I wanted to know more about how their retirement expectations will be met.
The number of Australians aged 65 years and older as a proportion of the overall population has increased from 4% in 1901 to 13.5% in June 2010. This is over 3 million people! Maybe the research and work we are doing at NetActuary on post retirement risk management is going to be important. By 2014 this proportion is projected to be between 21% and 23% of the population!!
The very old (i.e. older than age 85) is the fastest growing age cohort. Currently it represents 1.8% of the population. It is projected to quadruple within the next 40 years.
There has been a recent lift in labour force participation by older workers. Recent Government initiatives may reinforce that. UK research shows that people coming up to retirement are increasingly finding their private pensions are not as good as they had hoped. A greater proportion of men opt for early retirement than women. This may be due to women having lower account balances.
Retirement is becoming a gradual process with more part-time and self employed work. Also, the proportion of retirees eligible only for a part Age Pension rather than a full pension is increasing quickly. There are big ramifications for financial planning. NetActuary can start by ensuring future calculators allow flexibility in part-time work. More than a million Australians aged 65 and over are born overseas. How good is your knowledge of the Italian old age pension that they may be entitled to?
The NetActuary Team