Give older workers a chance

Dr Spooner, who is a senior academic in the management discipline group at the University of Tasmania (UTS), tells Wendy Frew from UTS that “we have always known we would face an ageing population and that any government would try to restrict access to the age pension”.

However, she adds, if older people end up “on the dole” or on disability pensions, all Australia would have achieved is a loss of dignity for older people.

“We can also be confident that older workers will cope better in the workforce if given half a chance,” says Dr Spooner.

“There is a huge amount of research to show that some employers do want to hire older workers,” she says, adding that they are attracted to their experience, maturity and reliability.

Hardware chain Bunnings and one of Australia's biggest banks, Westpac, are reportedly among the companies seeking older workers.

“Who are these companies employing? Ex-bankers, accountants, lawyers, people with good communication skills. Ex-school teachers are working in call centres, former nurses are even selling medical goods.”

UTS Professor Susan Thorp, whose research focuses on retirement savings and long horizon wealth management, says that under existing rules, a person born in 1964 will have seven years between gaining access to their superannuation at the age of 60 and being eligible for the age pension at 67.

On average, people have only $200,000 in superannuation when they retire, she adds.

“Seven years is a long time in self funded retirement – enough to use up $200,000 if you withdraw annual income roughly equal to the full pension.

“If someone faces a gap between getting their super and getting the pension, they might move onto the disability pension. But what happens if the government tightens the eligibility for that pension? How the government sets the screening standards for the disability pension will make a big difference for many people.

“It is not difficult to imagine a range of jobs that people simply can't keep doing when they are in their 60s or 70s – electricians, plumbers, even farmers – and that could mean you might have to go on to the unemployment benefit, which is very low.”

Professor Thorp claims many people overestimate the value of a retirement lump sum compared with a regular income and are unable to work out what a lump sum would mean in annual income.

“A superannuation lump sum is likely the biggest amount of money most people have ever seen in one hit. They have to decide what to do with it in that first year of retirement and what to do for the next 25 years.

“The uncertainty multiplies because we don't know how long we are going to live, we don't know what the government will do to pensions and superannuation rules and we don't know what the investment markets will do.”