Retirement intentions and labour force participation by older workers

Parliament house flag post

Retirement intentions and labour force participation by older workers

Posted 10/12/2013 by Kai Swoboda

On 9 December 2013, the Australian Bureau of Statistics (ABS) released the results of its 2012–13 survey on retirement and retirement intentions. The data collected by the survey provides information on retirement trends, the factors which influence decisions to retire, and the income arrangements that retirees and potential retirees have made to provide for their retirement. Another indicator of retirement behaviour is the participation by older workers in the labour force.

Labour force participation amongst older workers has increased significantly over the past 15 years, particularly among females (Figure 1). The decision to retire is an important factor in understanding whether such an increase will continue into the future.

Retirement is usually defined in terms of leaving full-time work and withdrawing from paid labour upon meeting the age pension eligibility age. However, retirement is also seen as not just a withdrawal from paid full-time work but also a lifestyle change, often to unpaid caring duties, part-time or voluntary work.

Key results from the ABS’s 2012 survey on retirement and retirement intentions include:

  • Of the 1.5 million men who had retired from the labour force, 25% had retired aged less than 55 years; 50% had retired aged 55-64 years; and 25% had retired aged 65 years and over. Of the 1.9 million women who had retired from the labour force, 55% had retired aged less than 55 years; 36% had retired aged 55-64 years; and 9% had retired aged 65 years and over
  • For men, the most commonly reported main source of personal income at retirement was a ‘government pension/allowance’ (51%), followed by ‘superannuation/annuity/allocated pension’ (25%). For women, the most commonly reported main source of personal income at retirement was also ‘government pension/allowance’ (42%). Only 10% of women reported ‘superannuation/annuity/allocated pension’ as their main source of personal income
  • Of the 4.7 million people in the labour force who indicated that they intend to retire from the labour force, 1.4 million people (37%) did not know the age at which they would retire (34% of men and 42% of women). Of those who did indicate an age: 
    • 17% intend to retire aged 70 years and over (19% of men and 15% of women);
    • 49% intend to retire aged 65-69 years (53% of men and 45% of women);
    • 25% intend to retire aged 60-64 years (22% of men and 29% of women); and
    • 9% intend to retire aged 45-59 years (7% of men and 12% of women).
  • For those in the labour force who intend to retire, the most common main factor influencing their decision about when they would retire was ‘financial security’ (39% of men and 36% of women), ‘personal health or physical abilities’ (23% of men and 23% of women), and ‘reaching the eligibility age for an age (or service) pension’ (13% of men and 11% of women).
Retirement behaviour is important to policy-makers across a broad range of areas. These include understanding the budget implications of expenditure such as the age pension and other social security payments, and the impact on the operation and growth of the superannuation system. Decisions about retirement also have broader economic implications on labour participation and productivity and social effects on health and caring in the community.

Similar retirement and retirement intentions surveys were first carried out by the ABS in 1983 and 1984. While the results of these earlier surveys are not directly comparable with the 2012–13 survey, the following general conclusions can be drawn about changes in retirement decision-making over the past 30 years:
  • For those who had retired, age at retirement increased for both males and females. For example, in 1983 around 80% of females had retired by the age of 55 compared to less than 60% in 2012
  • For those who had retired, the proportion of retirees nominating illness or injury as the main reason for retirement increased (15% in 1983 to 23% in 2012–13)
  • For those who had retired, those nominating superannuation as the main source of income at retirement more than doubled (9% in 1983 to 25% in 2012–13), and
  • For those who had not yet retired (but intended to do so), the proportion that did not know what age they would retire was unchanged between 1984 and 2012–13 (around 37%). However, the proportion of females who did not know increased (12% in 1984 to 20% in 2012–13) but the proportion of males who did not know decreased (26% in 1984 to 18% in 2012–13).
Going forward, some areas of interest to policy makers from the 2012–13 survey will be how factors such as industry and occupation of those intending to retire are affected by structural changes in the economy. Also important to policy makers is how changes to age-based thresholds for accessing the aged pension and superannuation may be affecting retirement planning.


Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print

FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament


Parliamentary Library Logo showing Information Analysis & Advice

Archive

Syndication

Tagcloud

Refugees asylum immigration Australian foreign policy Parliament climate change elections women social security Australian Bureau of Statistics Employment indigenous Australians Sport illicit drugs people trafficking taxation Medicare welfare reform Australian Defence Force higher education welfare policy United Nations health financing gambling Asia Middle East criminal law disability Australian Sports Anti-Doping Agency World Anti-Doping Agency United States federal budget school education forced labour aid statistics Australian Electoral Commission WADA income management Industrial Relations emissions trading dental health Australia in the Asian Century steroids detention Private health insurance OECD ASADA labour force transport Law Enforcement Australian Federal Police people smuggling poker machines National Disability Insurance Scheme Australian Crime Commission 43rd Parliament slavery election results Papua New Guinea Australian Public Service constitution International Women's Day corruption Afghanistan Fair Work Act child protection Aviation debt federal election 2013 parliamentary procedure ALP New Zealand Newstart Parenting Payment political parties Census politics High Court skilled migration voting Federal Court terrorist groups Higher Education Loan Program HECS governance youth paid parental leave environment foreign debt gross debt net debt defence capability customs Senate doping health crime health risks multiculturalism aged care Gonski Review of Funding for Schooling sex slavery sea farers Special Rapporteur leadership United Kingdom UK Parliament Electoral reform banking firearms public policy Population violence against women domestic violence mental health China ADRV terrorism science research and development social media pensions welfare ASIO intelligence community Australian Security Intelligence Organisation accountability public service reform Carbon Pricing Mechanism carbon tax mining military history employer employee fishing by-election European Union same sex relationships international relations coal seam gas family assistance planning Senators and Members United Nations Security Council Australian economy food vocational education and training Drugs health reform Indonesia children codes of conduct terrorist financing health system money laundering early childhood education Canada Financial sector national security fuel disability employment Tasmania integrity transparency Australian Secret Intelligence Service sexual abuse federal state relations World Trade Organization Australia housing affordability bulk billing water renewable energy children's health health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation expertise climate Intergovernmental Panel on Climate Change Department of Agriculture Fisheries and Forestry food labelling Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets Indigenous constitutional recognition of local government local government consumer laws PISA royal commission US politics language education baby bonus Leaders of the Opposition Parliamentary remuneration Australia Greens federal election 2010 servitude Trafficking Protocol energy forced marriage rural and regional Northern Territory Emergency Response ministries social citizenship human rights emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories workers Bills anti-corruption fraud bribery corporate ownership whistleblower G20 economic reform innovation standards NATO Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly public health smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine regional unemployment asylum refugees immigration political finance donations foreign aid Economics efficiency productivity human rights; Racial Discrimination Act employment law bullying asylum seekers Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies trade unions same-sex marriage disorderly conduct retirement Parliament House standing orders public housing prime ministers election timetable sitting days First speech defence budget submarines Somalia GDP forestry world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission regulation limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders animal health live exports welfare systems infant mortality middle class welfare honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Constitutional reform referendum Rent Assistance competition policy pharmaceutical benefits scheme obesity evidence law sacrament of confession US presidential election international days DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant homelessness regional engagement social determinants of health abortion Youth Allowance Members suspension citizen engagement policymaking workplace health and safety Trafficking in Persons Report marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament alcohol Korea rebate Australian Greens presidential nomination Racial Discrimination Act entitlements political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing Hung Parliament political education social inclusion Social Inclusion Board maritime early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin Iran sanctions Norway hospitals republic President Barack Obama Presidential visits ANZUS qantas

Show all
Show less
Back to top