Retirement at 70? It’s coming, whether we like it or not

This week, Denmark did something bold, and frankly, confronting. It locked in a plan to lift its state pension age to 70 by 2040. Not a proposal. Not a think tank idea. Actual law.

Seventy. Let that sink in.

This week, Denmark made the bold move to shift its retirement age. And it won’t be long until countries everywhere are forced to follow suit.Credit: Louie Douvis

It’s the kind of move that makes people everywhere shift in their seats. Because if Denmark can do it, so can we. And whether we like it or not, the ripple effect is coming.

In Denmark, “retirement age” means the age you can access the state pension, their version of our age pension. It’s currently 67. It’ll rise to 68 by 2030, and then 70 by 2040, when today’s 55-year-olds hit that milestone. It’s been legislated in line with life expectancy – so as people live longer, the pension age just rises. Automatically – no political debate required, and no elections lost to the shift.

The message is clear: you’ll still get support, but not until much later in life. Want to retire earlier? That’s on you. You’ll need your own savings to bridge the gap.

That’s precisely what many Danes are preparing for – because while the state pension won’t kick in until 70, many private and workplace pensions can still be accessed from around age 60 or 62.

Expect more pressure to plan your own income, not less. Denmark had the guts to say it out loud. I’m not sure Australia’s ready to.

People who want to stop working earlier can do so, but they’ll need to rely on their own savings for a longer period before the state support begins. Bridging that gap is now a personal responsibility.

The Danish system looks generous, but it’s designed to be fair, not cushy - though many Australian pensioners might think otherwise. If you’ve lived in Denmark for 40 years between age 15 and retirement, you’re entitled to the full public pension. Less than that, and you receive a proportional amount. And it’s no small sum.

The full Danish folkepension pays around AUD $57,000 a year, but after tax, most retirees take home between roughly AUD $40,000 and $42,000. That includes a base pension, which everyone gets, and a supplement, which is means-tested. About half the payment is universal; the rest tapers off if you have higher income from savings or investments.

It’s a lot more generous than our pension, but it’s still a safety net, not a luxury. But if you haven’t built up your own retirement savings, you’ll be working longer or retiring lean.

Meanwhile, in Australia we haven’t made any big statements about retirement age recently, but we’ve quietly been moving in the same direction. The age pension age is now 67. Access to super starts at 60. Most Australians retire somewhere in the middle, not because of the rules, but because of redundancy, burnout, or the long-awaited chance to actually enjoy life.

We don’t really have a set retirement age. What we have is a cluster of access points at 60, 65 and 67, and a silent expectation that you’ll figure it out for yourself.

And while we’ve built one of the best savings systems in the world in superannuation, we’ve failed to finish the job. We’ve neglected the retirement phase almost entirely. Most Australians don’t know how much to take out, how long it will last, how it works together with the age pension, or whether they’re even on track.

And let’s be clear: there’s no $40,000-a-year pension coming to everyone at 67 or even 70 here. Ours is fully means-tested, a fair amount lower and difficult to understand.

Retirement is increasingly going to be on our own backs. So let’s stop treating it like a finish line or a grand holiday.Credit: Tanya Lake

So maybe our government doesn’t need to lift the retirement age to 70. Perhaps they’ll just wait for superannuation to lift many Australians out of eligibility for it, and won’t have to make any bold or controversial moves that might see one party lose an election because of angry pensioners revolting in the streets.

So while we’re not lifting our pension age to 70 just yet, we shouldn’t assume we’ll never go there. The economics of longer lives don’t just go away.

Here’s what we need to face. We’re living longer. Much longer. One in four 50-year-olds today will live past 95. That means a 30-year retirement isn’t extreme – it’s average. Maybe even an underestimate.

Raising the retirement age to 70 feels harsh to today’s retirees. But if you’re 50 today and not planning for retirement, knowing you might live such a long life? That’s reckless.

And expecting the pension to carry the full load of your living costs, when we’ve got one of the best private savings systems in the world in super - that really is a missed opportunity.

So what happens next? Honestly, I think we should expect change. Maybe not next year, but eventually. The pension age will rise, and the system will have to adapt. But here in Australia, we’re on a different path to the Danes so it might not need to be as extreme.

We don’t pay every citizen more than $20,000 a year for 20 plus years - so the pressure on our public system isn’t the same, despite what headlines might suggest.

Over the next 20 years, superannuation will take on more of the heavy lifting. Most Australians who’ve worked throughout their lives won’t rely on the age pension the way 44 per cent of retirees do today. They’ll have their own savings, and with that comes greater choice and flexibility - but also a bigger need to plan and prepare.

That’s what we need to recognise now. Retirement is increasingly going to be on our own backs. So let’s stop treating it like a finish line or a grand holiday. It’s a phase. A long one. And we need a system that reflects that - supporting phased retirement, guiding drawdown decisions, and offering real help without a $5000 advice bill for the basics.

Right now, we’re leaving people to guess. And that guesswork is costing Australians their lifestyle, their confidence, and sometimes their dignity. Will we raise the retirement age to 70? Eventually - maybe, maybe not. But honestly? It doesn’t matter.

Because whether the number shifts or not, the burden is already shifting away from the government. Superannuation is steadily replacing the pension. The responsibility for funding your own retirement is now sitting squarely on your shoulders.

Expect that to continue. Expect more pressure to plan your own income, not less. Denmark had the guts to say it out loud. I’m not sure Australia’s ready to.

Bec Wilson is the author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife. She writes a weekly newsletter at epicretirement.net and hosts the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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