One of the many things COVID has taught us is that plans don’t always work out the way we want them to. For many Australians, that means reconsidering how and when they’ll be able to retire.
Recent research commissioned by Equip revealed that 10.5% of Australians are planning to delay their retirement as a direct result of the pandemic. A quarter of these people intend to work for a further 2-3 years, and half of them are planning to work for another 4-5 years.
The research suggests there are four main reasons for this:
1. Reduced working hours
One in five workers reported that their working hours have been reduced since COVID began. Combined with the recent market volatility, this has likely impacted their retirement savings.
2. Less job security
Almost one in three Australian workers (30%) feel less secure in their role since COVID began. This can lead to uncertainty about what may happen in the years leading up to retirement.
3. Don’t have the financial capacity to retire
While 68% of Australians would like to retire by the age of 65, only 49% believe they will have the financial capacity to do so.
4. Unsure how much they need to retire comfortably
More than a quarter of Australian workers don’t know how much they need to retire comfortably. Most over-estimate the amount by a margin of at least 50%.
However, the decision to delay retirement isn’t always related to uncertainty or financial hardship. For some people, COVID reinforced their desire for purpose – especially those who endured lengthy lockdowns, where it became clear that work can provide both structure and satisfaction.
What this means for employers
Open communication and flexibility are key to ensuring that older employees remain engaged and stimulated at work in the lead-up to their retirement.
This may involve offering to gradually reduce their working hours, providing opportunities for purposeful work, or helping them build new skills. After 30 or 40 years of working, learning new skills can spark renewed interest in personal development.
Supporting older employees helps create an appealing work environment, which is a great way to retain valuable experience and knowledge in your business for longer.
