Retirement and work blend is the way of the future, study finds

The words ‘work’ and ‘retired’ used to be mutually exclusive, but Generation Xers and Baby Boomers are blurring the lines more than ever.

More people are seeking a purpose after retirement age. Picture: iStock

More than three-quarters of older Australians are open to working beyond retirement age, and only 24 per cent are certain they will have enough money to retire comfortably.

People aged 55 to 65 no longer see the retirement age of 67 as a set date, says a new study, as they instead focus on freedom, flexibility and a fear of running out of money as high inflation, volatile financial markets and longer lifespans erode nest eggs.

“Retirement used to be a hard finish line, but not anymore,” says the study by Allianz Retire+ and retirement educator Bec Wilson.

It says more than one-third of older Australians plan to shift into retirement in gradual steps over two or more years, while others plan to technically retire to access their superannuation and then return to some form of employment. Forty per cent believe part-time work will be an income source during retirement.

Allianz Australia Life Insurance CEO Adrian Stewart said there was a broader shift in how people viewed their later years, with more seeking a sense of purpose and engagement.

“The ability to continue working offers continued social interaction, intellectual stimulation, and a way to stay active,” he said.

Healthcare advancements and more flexible workplaces enabled older people to contribute for longer, Mr Stewart said.

Today’s seniors seek engagement more than previous generations, experts say. Picture: iStock

“Currently, an average of 700 people retire every day in Australia … The traditional view of retirement as a definitive end to one’s career is simply outdated,” he said. “It’s been a gradual shift.

“We’ve had 30-plus years of superannuation, changes in life expectancy, improved health, and a greater emphasis on lifelong learning and adaptability.

“Plus, we have a generation which is happy to run their own race and make these developments work for them.”

Financial advisers also see the trend. MBA Financial Strategists director Darren James said most older people were looking for flexibility around lifestyle and work. “It’s very rare now for me to hear someone say ‘I’m retiring cold turkey on this date’,” he said.

“If they like what they’re doing and have the flexibility of reduced working hours and longer weekends, it ticks a lot of boxes. You are a long time retired.”

The study of almost 850 older Australians found many were integrating work, hobbies, travel and passion projects into their lives, but longer and healthier retirements come with a financial cost.

Ms Wilson said retirement for many people could span more than a quarter of a century.

“Rather than succumbing to fear and uncertainty, many Australians are eager to embrace a positive outlook,” she said. “But many don’t feel financially prepared to navigate the transition.”

The study found fewer than a quarter of older Australians were certain they had enough money for a comfortable retirement, while 56 per cent believed they would “probably” have enough.

It found 38 per cent planned to work in retirement and another 39 per cent were open to the idea.

It said many retirees underestimated the implications of life expectancy, which in the past decade had increased by 1.3 years for men and one year for women.

Adjusted median life expectancies today are 88 for men and 90 for women.

Allianz’s Mr Stewart said working beyond retirement age could reduce pressure on retirement savings. “This means that individuals might not need to accumulate as large a nest egg if they plan to remain in the workforce, at least part-time,” he said.

Originally published as Retirement and work blend is the way of the future, study finds