Uncertainty and caution leading to delayed retirement plans

I'm retired | | 2 min read

 

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.


Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at equipsuper.com.au.  Financial advice services may be provided to members by the trustee’s related entity Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). *Past performance is not an indication of future performance.

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