SUMMARY OF FINDINGS


OVERVIEW

The 2008-09 Multipurpose Household Survey (MPHS) revealed that of the 7.6 million people aged 45 years and over who had, at some time, worked for two weeks or more, 4.3 million (56%) were in the labour force, 3.0 million (40%) had retired from the labour force, and the remaining 305,300 (4%) were not currently in the labour force but had not retired.

The likelihood of being retired increased with age. For those aged 45-49 years, just 6% were retired, compared to 22% of 55-59 year olds, 70% of 65-69 year olds and 91% of those aged 70 years and over.

There were more men aged 45 years and over in the labour force than women of the same age. Conversely, there were more women who had retired than men, partly reflecting the fact that there are more women in the older age groups than men, and also reflecting the fact that women tend to retire earlier than men.

In 2008-09, 62% of men aged 45 years and over were in the labour force, 35% had retired, and 3% were not in the labour force but had not yet retired. In contrast, 51% of women aged 45 years and over were in the labour force, 44% had retired and the remaining 5% were not in the labour force but had not yet retired.

RETIRED FROM THE LABOUR FORCE

There were 3.0 million people aged 45 years and over who reported that they were retired from the labour force. This group comprised 1.3 million men and 1.7 million women. Half of all retired people were aged 70 years and over (54% of retired men and 47% of retired women were aged 70 years and over).


Age at retirement

It is important to note that data on retirement age presented in this publication only refer to 'surviving' retirees aged 45 years and over in 2008-09. Therefore, the distribution of retirement age in this population is not representative of the age at which all people retire. For example, based on Australian life expectancy, a person who retired aged 40 years in 1984 (aged 65 years in 2009) would more likely be alive to participate in this survey than a person who retired aged 65 years in 1984 (aged 90 years in 2009). This effect will be more pronounced for estimates presented in relation to people who retired a long time ago, but will have some affect on all estimates, particularly as 35% of the retired population included in this publication retired more than 20 years ago.

The average age at retirement from the labour force for people aged 45 years and over in 2008-09 was 53 years (58 years for men and 49 years for women). Of the 1.3 million men who had retired from the labour force:

• 27% had retired aged less than 55 years;
• 53% had retired aged 55-64 years; and
• 21% had retired aged 65 years and over.

The 1.7 million women who had retired from the labour force had retired on average at a younger age than men. The ages at which already retired women had retired from the labour force were as follows:

• 58% had retired aged less than 55 years;
• 34% had retired aged 55-64 years; and
• 8% had retired aged 65 years and over.

The average age at retirement for recent retirees (those who have retired in the last five years) was 60.2 years. Within this group, the difference between the retirement age of men and women was relatively small, with women retiring a little younger than men (the average retirement ages for this group were 61.1 years for men and 59.2 years for women).


Reasons for ceasing last job

Of the 2 million retired people who had worked in the last 20 years, 93% had held a full-time job at some stage. For nearly three-quarters (74%) of those who held a full-time job, their last job held prior to retirement was full time. The remainder worked part time before retiring.

Among both retired men and women whose last job was less than 20 years ago, the most commonly reported main reason for ceasing their last job was 'reached retirement age/eligible for superannuation/pension' (42% of men and 27% of women). These people had one of the highest average retirement ages of 62 years, (63 years for men and 61 years for women). Other commonly reported main reasons given by people for ceasing their last job were 'own sickness, injury or disability' (29% of men and 19% of women) and 'retrenched/dismissed/no work available' (10% of men and 11% of women).

Sources of income during retirement

For men, the most commonly reported main source of personal income at retirement was a 'Government pension or allowance' (52%), followed by 'superannuation or annuity' (26%). Although a 'Government pension or allowance' was also the most common source among women (40%), this was followed closely by 'no personal income' (40%). Of the women who reported 'no personal income', 91% reported 'partner's income' as their main source of funds for meeting living costs at retirement.

For many people, their main source of personal income during retirement changed from that at the beginning of retirement with more people becoming reliant on a 'Government pension or allowance'. While just under 1.4 million (46%) of those aged 45 years and over who had retired reported that a 'Government pension or allowance' was their main source of personal income at retirement, almost 2 million (65% of all those who were retired) indicated that this was now their main source of current income. This represents an increase of 43% compared with the number of people who stated that it was their main source of personal income at retirement. The next most commonly reported main sources of current personal income were 'superannuation or annuity' (15%) and 'dividends or interest' (8%).

Although women reporting 'no personal income' as their main source of personal income decreased from 40% at retirement to 8% for current income, a similar proportion (88%) reported 'partner's income' as their main source of funds for meeting current living costs.

More than half of those whose main source of income at retirement was 'superannuation or annuity', 'dividends or interest' or 'rental property income' continued to rely on them as their main source of current income (64%, 51% and 54% respectively).


Superannuation scheme membership

Of the 3.0 million people aged 45 years or over who were retired from the labour force, 1.7 million (56%) had made contributions to a superannuation scheme. Men were more likely to have made contributions to a superannuation scheme than women. More than two-thirds (69%) of retired men aged 45 years and over had contributed compared to 46% of women. Of those who had made contributions, 58% had received all or part of their superannuation funds as a lump sum payment (58% of men and 57% of women). Many of those who received a lump sum payment used it to pay off or improve their existing home or purchase a new home (34% of men and 32% of women), to buy or pay off a motor vehicle (15% of men and 11% of women), or clear other outstanding debts (13% of men and 14% of women). Some reinvested their lump sum payment into a bank account, personal savings or other investment (24% of men and 19% of women), or an approved deposit fund, deferred annuity or other superannuation scheme (23% of men and 16% of women).

Of the 1.7 million retired people aged 45 years and over who had contributed to a superannuation scheme, men were more likely to have contributed for a longer period of time than women. Just over half of the men in this group (51%) had contributed for 20 years or more, compared to 22% of women in the same group.


Health and housing expenses in retirement

Of the 3.0 million people aged 45 years or over who were retired from the labour force, more than three-quarters (76%) were home owners without a mortgage, less than half (47%) had private health insurance and 59% considered their health to be good, very good or excellent.


PREVIOUSLY RETIRED

There were 217,700 people aged 45 years and over who had previously retired from the labour force but at the time of the survey were either in the labour force or were planning to look for, or take up, work in the future. Most of this group were women (144,500), and most of these women were in the labour force at the time of survey (120,400).

The most commonly reported reasons for returning to the labour force were 'financial need' (44%), 'bored/needed something to do' (35%) and 'interesting opportunity came up' (12%).


INTENTIONS TO RETIRE FROM THE LABOUR FORCE

Of the 4.3 million people in the labour force aged 45 years and over, 3.4 million (78%) indicated that they intend to retire from the labour force in the future. Of the remaining 954,700 people:

• 377,600 did not know whether they intend to retire from the labour force;
• 575,400 never intend to retire from the labour force; and
• 1,600 were unemployed and had never worked.

Persons in the labour force aged 45 years and over, Retirement and retirement intentions
		2004-05	2006-07	2008-09
		'000	'000	'000
Full-time workers(a)		2 574.9	2 739.8	2 964.4
	Intends to retire from the labour force	2 298.9	2 209.0	2 337.1
	Did not know whether will retire(b)	na	249.3	232.4
	Never intends to retire	276.0	281.5	395.0
Part-time workers(a)		1 056.8	1 112.8	1 268.7
	Intends to retire from the labour force	956.9	889.3	963.8
	Did not know whether will retire(b)	na	134.7	139.6
	Never intends to retire	99.9	88.8	165.3
Unemployed		113.2	118.8	82.1
	Intends to retire from the labour force	100.5	82.0	59.8
	Did not know whether will retire(b)	na	*14.0	*5.6
	Never intends to retire	*8.5	*9.0	*15.1
	Had never worked	*4.3	*14.0	**1.6
In the labour force		3 744.9	3 971.4	4 315.3
	Intends to retire from the labour force	3 356.3	3 180.3	3 360.7
	Did not know whether will retire(b)	na	398.0	377.6
	Never intends to retire	384.4	379.3	575.4
	Had never worked	*4.3	*14.0	**1.6
* estimate has a relative standard error of 25% to 50% and should be used with caution
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use
na not available
(a) Based on hours usually worked per week (in all jobs).
(b) Data not collected in 2004-05.

More than two-thirds (71%) of employed people who intended to retire worked full-time. About 38% of these intended to retire from full-time work and then work part-time before retiring from the labour force. Over one-third (35%) intended to continue with full-time work until retiring from the labour force. The remainder did not know whether they intended to take up part-time work before retirement.


Plans to phase in retirement

Of the 810,900 people who intended to continue with full-time work until retirement, 73% intended to remain with their current employer and had no further plans to phase in retirement. A further 11% intended to remain with their current employer but with less demanding duties. Of those who planned to work full time until retirement, only 6% intended to change their employer before retiring.

There were 888,900 people who intended to leave full-time work and take up part-time work before retirement. Of these, 61% planned to continue on with their current employer, 21% intended to change their employer and the remaining did not know whether they would change employers. Of those intending to work part time and change their employer, 45% planned to change to a different line of work, 28% planned to work on a contract basis and 28% intended to work more hours from home.


Age intends to retire

Of the 3.4 million people in the labour force who indicated that they intend to retire from the labour force, 1.3 million people (or 38%) did not know the age at which they would retire (35% of men and 41% of women). Of those who did indicate an age:

• 12% intend to retire aged 70 years and over (14% of men and 9% of women);
• 46% intend to retire aged 65-69 years (52% of men and 39% of women);
• 29% intend to retire aged 60-64 years (24% of men and 35% of women);
• 12% intend to retire aged 55-59 years (9% of men and 15% of women);and
• 1.4% intend to retire aged 45-54 years (0.7% of men and 2.3% of women).

The average age at which people intended to retire was 63.4 years (64.2 years for men and 62.5 years for women).


Main factor influencing decision about when to retire

For those in the labour force who intend to retire, the most common main factor influencing their decision about when they would retire was 'financial security' (39% of men and 39% of women), 'personal health or physical abilities' (23% of men and 22% of women), and 'reaching the eligiblity age for an age (or service) pension' (12% of men and 11% of women).

Main expected source of income at retirement

Just over half (53%) of the 3.4 million people aged 45 years and over who indicated that they intend to retire from the labour force reported their main expected source of personal income at retirement as 'superannuation or annuity'. More than half of men who intended to retire reported this (58%), as did 47% of women. The prevalence of 'superannuation or annuity' as the main expected source of income at retirement is consistent with the increase in the number of people participating in superannuation schemes. Just under 94% of people intending to retire indicated that they had contributed to a superannuation scheme at some time, compared with 56% of people who had already retired.

The second most commonly reported main expected source of personal income was a 'Government pension or allowance' (27%), and this was reported by 24% of men intending to retire and 31% of women. It is interesting to note that 7% of people aged 45 years and over who intended to retire did not know what their main expected source of income at retirement would be - this was reported by 7% of men and 8% of women.

The main expected source of funds for meeting living costs at retirement varied between men and women. Although personal income was the most common expected source for both men (77%) and women (65%), 18% of women expected to rely on 'partner's income' in contrast to only 4% of men.

There were some notable differences reported by those who had already retired compared to those who intended to retire regarding their main (expected) source of personal income at retirement. While 46% of people aged 45 years and over who had already retired reported a 'Government pension or allowance' as their main source of income at retirement, only 27% of people aged 45 years and over who were intending to retire indicated that this would be their main expected source of income at retirement. Although 'superannuation or annuity' was reported as their main source of income at retirement by just 17% of those already retired, more than half of those who intended to retire (53%) expected that this would be their main source of income at retirement.

A similar inconsistency emerged for main (expected) source of funds for meeting living costs at retirement. While only 11% of those intending to retire expected to rely on 'partner's income', this was reported as the main source of funds by 31% of those who had already retired.


Plans for a healthy/active retirement

Almost two-thirds (61%) of the 3.4 million people aged 45 years and over who intend to retire from the labour force reported having made plans to be financially secure when they permanently give up work (65% of men and 56% of women). Whilst 33% of men and 28% of women had made plans to be in suitable housing at retirement, similar numbers had not thought at all about their housing needs (31% of men and 33% of women).

Women (42%) were more likely to have thought about doing unpaid voluntary work than men (31%), who had mostly not thought about this at all (44%). With regard to being socially active, mentally active and physically active during retirement, the most common response among those intending to retire was to 'continue with current behaviours' (36%, 34% and 37%, respectively).