SUMMARY OF FINDINGS

OVERVIEW

The 2016–17 Multipurpose Household Survey (MPHS) found that of the estimated 9.4 million persons aged 45 years and over who had, at some time, worked for two weeks or more, 4.9 million (52%) were in the labour force while 3.6 million (38%) had retired from the labour force (Table 1).

For those aged 45-49 years, just 5% were retired, compared with 64% of 65–69 year olds and 82% of those aged 70 years and over (Table 1).

In 2016–17, of men aged 45 years and over, 58% were in the labour force, 36% had retired, and 3% were not in the labour force but had not yet retired. In contrast, 47% of women aged 45 years and over were in the labour force, 40% had retired and 5% were not in the labour force but had not yet retired (Table 1).

RETIRED FROM THE LABOUR FORCE

In 2016–17, there were 3.6 million persons, aged 45 years and over, who reported that they were retired from the labour force. This group comprised 1.7 million men and 1.9 million women. Just over half of all retired persons were aged 70 years and over (56% of retired men and 52% of retired women) (Table 1).

Age at retirement

It is important to note that data on retirement age presented in this summary only refer to 'surviving' retirees aged 45 years and over in 2016–17. Based on this, the distribution of retirement age in this population may not be representative of the age at which all persons retire. For example, based on Australian life expectancy, a person who retired aged 40 years in 1992 (aged 65 years in 2017) would more likely be alive to participate in this survey than a person who retired aged 65 years in 1992 (aged 90 years in 2017). This effect will be more pronounced for estimates presented in relation to persons who retired a long time ago, but will have some effect on all estimates, particularly as 30% of the retired population included in this summary retired more than 20 years ago. It should also be noted that persons living in non-private dwellings such as retirement homes are excluded from this survey. This may result in the average age at retirement data being lower than reality (Table 3).

The average age at retirement from the labour force for persons aged 45 years and over in 2016–17 was 55.3 years (58.8 years for men and 52.3 years for women). Of the 1.7 million men who had retired from the labour force (Table 3):

• 25% had retired aged less than 55 years;
• 46% had retired aged 55–64 years; and
• 29% had retired aged 65 years and over.

The 1.9 million women who had retired from the labour force had retired on average at a younger age than men. The ages at which women retirees had retired from the labour force were as follows (Table 3):

• 46% had retired aged less than 55 years;
• 39% had retired aged 55–64 years; and
• 15% 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 62.9 years. Within this group, there was a difference between the retirement age of men and women, with women retiring a little younger than men (the average retirement ages for this group were 63.6 years for men and 62.1 years for women) (Table 3).

Reasons for ceasing last job

Among both retired men and women whose last job was less than 20 years ago, a commonly reported main reason for ceasing their last job was 'reached retirement age/eligible for superannuation/pension' (36% of men and 22% of women). These persons had average retirement ages of 63.5 years (64.1 years for men and 62.7 years for women). Other commonly reported main reasons given by persons for ceasing their last job were 'own sickness, injury or disability' (21% of men and 12% of women) and 'retrenched/dismissed/no work available' (7% of men and 5% of women) (Table 5).


Sources of income during retirement

For men who have retired, commonly reported main sources of personal income were 'government pension/allowance' (49%) and 'superannuation/annuity/allocated pension' (33%). For women who have retired, commonly reported main sources of personal income were also 'government pension/allowance' (45%) and 'superannuation/annuity/allocated pension' (17%). For persons who have retired, just under half (37%) of women reported 'partner's income' as their main source of funds for meeting living costs compared to 9% of men (Table 6).

Superannuation scheme membership

Of the 3.6 million persons aged 45 years or over who were retired from the labour force, 2.3 million (65%) had made contributions to a superannuation scheme. Men were more likely to have made contributions to a superannuation scheme than women. Just under three quarters (74%) of retired men aged 45 years and over had contributed compared to 58% of women (Table 8).

Of those who had made contributions, 52% had received all or part of their superannuation funds as a lump sum payment. Many of those who received a lump sum payment used it to pay off or improve their existing home or purchase a new home (36% of men and 32% of women) or to reinvested their lump sum payment into a bank account, personal savings or other investment (21% of men and 19% of women). Some cleared other outstanding debt (19% of men and 17% of women) or invested in an approved deposit fund, deferred annuity or other superannuation scheme (18% of men and 13% of women) (Table 8).

Of the 2.3 million retired persons 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 (59%) had contributed for 20 years or more, compared with 38% of women in the same group (Table 8).

PREVIOUSLY RETIRED

There were 177,500 persons 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 (108,200), and most of these women were in the labour force at the time of survey (93,800) (Table 12).

Commonly reported reasons for returning to the labour force were 'financial need' (42%) and 'bored/needed something to do' (32%) (Table 12).

INTENTIONS TO RETIRE FROM THE LABOUR FORCE

Of the 4.9 million persons in the labour force aged 45 years and over, 3.9 million (79%) indicated that they intended to retire from the labour force in the future.

For employed persons who intended to retire from the labour force, 69% worked full-time. Of full-time workers, 34% intended to move into part-time work before retiring from the labour force, and 32% intended to continue with full-time work until retiring from the labour force (Table 1).

Plans to phase in retirement

Of the 949,300 persons who intended to continue with full-time work until retirement, 65% intended to remain with their current employer and had no further plans to phase in retirement. A further 17% intended to remain with their current employer but with less demanding duties. Of those who planned to work full-time until retirement, only 8% intended to change their employer before retiring (Table 11).

Of those intending to retire, approximately 37% of persons intended to leave full-time work and take up part-time work before retirement. Of these, 67% planned to continue on with their current employer, 20% intended to change their employer and the remainder 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, 25% planned to work on a contract basis and 21% intended to work more hours from home (Table 11).

Age intends to retire

Of the 3.9 million persons in the labour force who indicated that they intended to retire from the labour force, 1.6 million persons (40%) did not know the age at which they would retire (36% of men and 44% of women). Of those who did indicate an age (Table 9):

• 20% intended to retire 70 years and older (22% of men and 18% of women);
• 50% intended to retire between 65 and 69 years (53% of men and 47% of women);
• 23% intended to retire between 60 and 64 years (19% of men and 27% of women); and
• 7% intended to retire between 45 and 59 years (6% of men and 8% of women).

The average age at which persons intended to retire was 65 years (65.5 years for men and 64.4 years for women) (Table 9).

Main factor influencing decision about when to retire

For those in the labour force who intended to retire, the most common main factors influencing their decision about when they would retire were 'financial security' (41% of men and 34% of women), 'personal health or physical abilities' (21% for both men and women), and 'reaching the eligibility age for an age (or service) pension' (13% for both men and women) (Table 9).


Main expected source of income at retirement

Just over half (54%) of the 3.9 million persons aged 45 years and over who indicated that they intended to retire from the labour force, reported their main expected source of personal income at retirement as 'superannuation/annuity/allocated pension'. More than half of men who intended to retire reported this (57%), and 52% of women. Approximately 94% of persons intending to retire indicated that they had contributed to a superannuation scheme at some time, compared with 65% of persons who had already retired (Tables 8 and 10).

Another commonly reported main expected source of personal income was a 'government pension/allowance' (25%), and this was reported by 22% of men intending to retire and 28% of women (Table 10).

The main expected source of funds for meeting living costs at retirement varied between men and women. Although personal income was a common expected source for both men (79%) and women (70%), 11% of women expected to rely on 'partner's income' in contrast to only 2% of men (Table 10).


There were some differences reported by those who had already retired compared with those who intended to retire regarding their main (expected) source of personal income at retirement. While 47% of persons aged 45 years and over who had retired reported a 'government pension or allowance' as their main source of income at retirement, only 25% of persons 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/annuity/allocated pension' was reported as their main source of income at retirement by just 24% of retirees, just over half of those who intended to retire (54%) expected that this would be their main source of income at retirement (Tables 7 and 10).

Similar differences emerged for main (expected) source of funds for meeting living costs at retirement. While only 6% of those intending to retire expected to rely on 'partner's income', this was reported as the main source of funds for meeting living costs by 24% of retirees (Tables 7 and 10).