65 no longer the magical retiring age

A British international retirement expert, Bruce Rigby, has been in Australia telling employers that 65 should no longer be treated as the “magical age” for retirement and that many older Australians wanted or needed to stay longer in the workforce.

Mr Rigby, who works for Mercer consultants in the United Kingdom (UK), said that employers needed to balance short-term business decisions with medium to long-term goals of retaining and developing further skills of their employees.

He said that government policy required adjustment on aged numbers because a “UN report recently predicted that by 2050 the number of people aged 60 or above will be 32% compared to 21% now in developed countries, and from 8% to 20% in the developing world”.

“In Australia the old-age dependency ratio, the number of over 65s to 15-64 year olds, in 2007 was 19%. By 2050 it is projected to be 40%. That’s twice as many people potentially requiring state benefit pensions”.

Mr Rigby said that such numbers had “profound implications for labour markets, consumer demand, politics, and social structures. You basically have a totally different shape of the population. It will require new approaches and responses from both government and the private sector”.

Mercer’s submission to the Rudd Government’s Henry review into taxes and pensions, has proposed an increase in the retirement age from 65 to 67 by 2025.

It also recommended that a portion of any super benefit be taken as an income stream rather than as a lump sum until at least age 85.