Insufficient super sees huge jump in workers over 65

Insufficient super sees huge jump in 65+ workers

By Gemma Jones

Older workers are being forced to stay in their jobs past 65 because they don’t have enough money saved for their retirement.

With super funds taking a battering due to share market fluctuations, longer life expectancies and incentives to keep working longer, an extra 92,000 Australians have opted to remain in the workforce past 65 since August 2007, bringing the total to 334,000, according to the Bureau of Statistics.

In NSW over the same period, the number of older workers has jumped from 77,000 to almost 110,000.

Figures show that at the height of the crisis super funds were losing an average 12.9 per cent. That figure had turned around in 2010 to show gains of 9.8 per cent.

“There’s no doubt that as a result of the GFC and the impact that had on retirement savings, many workers may have had to postpone retirement or maybe move into part-time employment as a result,” Salvador Saiz, from superannuation research company SuperRatings, said.

Financial adviser Stuart Barry said longer life expectancies and changes that allow people to access part of their super while working part-time or claim a full aged pension while working casually had added to the trend.

The workforce participation rate for Australians over 65 has almost doubled in the past decade from 5.9 per cent to 10.8 per cent, and the number of older workers has risen from 142,000. Sydney has the highest participation rate for older workers at 11.7 per cent, up from 5.6 per cent a decade ago.

“I have clients coming in and saying with all this uncertainty out there, should I be working longer?” Mr Barry said.

“It is not just about the lower returns we have had in recent years, but also it has given people a sense of uncertainty about how long their money will last.”

Eureka Financial Group’s Greg Cook said the super losses were a factor, along with more flexible work options.”If markets had continued like they were pre-GFC a lot of people would be spending more time and money on lifestyle pursuits rather than mixing it up with either full-time or part-time work,” he said. “The thing I talk about to clients is you hear people saying I was 57, I could have retired and then the global financial crisis hit and now I have to work for five years. But in some respects the boom before the GFC was artificial.”

A spokesman for Treasurer Wayne Swan said that from July those receiving the aged pension can earn up to $250 a fortnight without losing any of their welfare benefit.

Gemma Jones is a political reporter with The Daily Telegraph, September 19, 2011