Early retirement:an unpleasant surprise?

Many Australians – particularly men – will be surprised by their own retirements, which might come earlier than they had expected.

Young men, especially, still hold to the traditional belief that they can safely plan to retire at the traditional age of 65.

However, new figures, produced by the Australian Bureau of Statistics, strongly suggest that this may not be so. Yet the bureau’s report is likely to be swamped, by all the bad news flowing from financial markets, right now.

That would be a pity. The bureau’s study, called Retirement and Retirement Intentions, should serve as a wake up call, for all people making long term financial plans.

The bureau reports, for example, that the average age of retirement, for Australian men, is now closer to 60 than 65. It’s 60.3, to be precise.

The average retirement age for women is lower, at 59.

Compulsory superannuation payouts will, generally, still be too small to fund a financially comfortable retirement. So a little advance planning, based on solid figures, rather than broad perceptions, is still as necessary as ever.

The bureau’s 56 page report, based on the findings of the 2006-07 Multi-Purpose Household Survey it conducted in 2006-07,is an excellent guide. It revealed that a no less than 42 per cent of Australians, who have chalked up their 45th birthdays, have already retired from the nation’s workforce.

That is some 3.1 million people.

Naturally, the likelihood of retirement rises with age. Only 6 per cent of 45-49 year olds had retired, at the time of the survey, but that increased to 23 per cent, among 55-59 year olds and 75 per cent of 65-69 year olds.

The bureau reported that sickness or injury often led to early retirement as did retrenchment.

The report’s catalogue number is 6238. For more detail, go to www.abs.gov.au