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The when and why of four million Australian retirees

Older Australians might be feeling their creaky knees, stiff backs and failing eyesight, but one thing they should not feel is neglected by government departments and agencies studying their potential financial futures. The many reports and reviews issued recently are giving greater understanding about retirement and attempting to improve the outcomes for Australians living on their savings.

Over the next five years, according to the Australian Bureau of Statistics (ABS), 670,000 Australian intend to retire, taking the total number retired to almost five million. A check of how often the word ‘retirement’ is searched for on Google over the last 10 years shows a recent and sustained spike.

Australia is not alone in focussing on its ageing population. The World Health Organisation reports that by 2030, 1 in 6 people in the world will be aged 60 and over, a formidable 1.4 billion people or an increase of 400 million in 10 years. The number will exceed 2 billion by 2050, including 425 million aged 80 and over. We will live in a world where 100th birthdays are common.

The strong focus on retirement

For most of the time since the introduction of compulsory superannuation for more workers in 1992, and increasingly as retirement has become a major social and political issue, the focus has been on accumulation. The demographic shift underway has forced a rethink towards the retirement phase and decumulation.

In addition to the recent Intergenerational Report and Legislating the Objective of Superannuation, regulators ASIC and APRA completed a joint review of the implementation of the Retirement Income Covenant, issued in 2020. Registerable Superannuation Entities (RSE) need to develop strategies to assist their members to know how much they can spend in retirement, confirming that many people die with the bulk of the wealth they held at retirement intact. The regulators were highly critical:

“Overall, there was a lack of progress and insufficient urgency from RSE licensees in embracing the retirement income covenant to improve members’ retirement outcomes.”

So with this bombardment of insights and guidelines on how governments and the financial sector are supposed to meet the needs of retirees, we should know who they are and why they retired.

For this we turn to the ABS which has issued a new report on Retirement and Retirement Intentions, based on FY21 data.

When are Australians retiring?

The ABS estimates there are already 4.1 million retirees in Australia. In 2020, 140,000 people retired, with an average age of 64.3 years. The age pension remains the primary source of income for most retirees.

Graph 1 shows the age when people retired from the labour force (that is, ceased working or looking for work).

The chart shows the current age versus age at retirement of retirees. For example, there are far more retirees over the age of 70 than people retiring at that age. People are still alive but they retired earlier. But in the age group 60 to 64, there are far more people retiring at that age. The average age at retirement is 65.4 for men and 63.7 for women.

Why are Australians retiring?

Retirement is a major change, giving up or losing regular income from work and relying on savings or a pension, but about 2,700 Australians a week take this step. The top three reasons for ceasing work are:

  • Reached retirement age or eligible for superannuation (28%)
  • Own sickness, injury or disability (13%)
  • Retrenched, dismissed or no work available (7%).

Women were more likely to retire to care for a person than men (4% versus 2%).

Not surprisingly, the age of retirement of people retrenched, dismissed or injured is much lower than people who voluntarily retire. It shows thousands of people in their 50s ‘retire’ each year against their own choice. One-third of retired women rely on their partner’s income after retirement, compared with only 7% of men.

Investment risk by generation

Turning to another recent report, the Australian Securities Exchange (ASX) releases an annual Australian Investor Study. The 2023 Report says that 10.2 million people or 51% of the adult population hold investments outside their home and superannuation. Over the years, the ASX has increasingly focussed on generational differences, especially as more younger investors start their journey with listed securities.

As should be expected, the 2023 Report shows retirees are highest for seeking ‘stable, reliable returns’ and lowest for ‘higher variability with potential for higher returns’. Retirees are also more likely than younger generations to hold a diversified portfolio.

SMSF members by age

A final check on SMSF usage by age from the latest ATO statistics (data for March 2023 is extrapolated from FY21). There were 606,000 SMSFs with 1,136,000 members, holding $890 billion.

Although there is much media coverage about younger generations opening SMSFs, only 3.1% of members are 34 years and under, although a strong 19.2% are aged 35 to 49. Which leaves 77.7% aged 50 and over, with high representation in all older age groups including 17.2% over the age of 75 and 11.9% between 70 and 74. It’s clear that SMSFs are a popular superannuation vehicle for older Australians.

The policy implications of these changes are profound, from the impact on government revenues, the demand for housing, the impending wealth transfer from baby boomers to their children, and the design of financial products for decumulation. Investors should factor demographic changes into assessing the future of any company.  


Graham Hand is Editor-At-Large for Firstlinks. This article is general information.


September 12, 2023

Where does ‘transitioning to retirement’ fit into the statistics? Eg cease full time work, (many employers are now very flexible allowing 2-3 days a week for ‘grey hair’ experience), or sit on some Boards, sell the family home, move to a lifestyle area. This is much more attractive than stepping off the cliff into 100% ‘retirement’ which has its risks.

September 12, 2023

It's not really worth it now in mine and many others opinions regarding TTR's, proof is in the declining numbers of people taking up the TTR option.

For most now, TTR and Preservation Age are the same. Easier to either get a 2nd job for a bit, quit that and claim all your Super as a Super Pension tax free and then continue working. Or genuinely stop work and get a Super Pension Tax free and start a new part time job to keep busy a couple days of the week or have a bit of extra income.

New SG payments from your employer will be preserved again until you cease work again, but the first lot is yours to keep as you met a condition of release at the time.

Andrew Smith
September 08, 2023

Important analysis and this 'A check of how often the word ‘retirement’ is searched for on Google over the last 10 years shows a recent and sustained spike.'

No coincidence, but the start in searches a decade ago coincides with the top end of the baby boomer bubble starting to its transition to retirement.

An historical mother lode of demographic change in our permanent population, but our media and politicians keep focused on the 'other' i.e. blaming 'immigrants' for 'population growth', hence, supposed decline in quality of life.

The OECD future trends are quite stark, and Australia is no different to elsewhere, (ever) increasing old age dependency ratios:

OECD (2023), Old-age dependency ratio (indicator). doi: 10.1787/e0255c98-en (Accessed on 07 September 2023)

Aaron Minney
September 08, 2023

Some good thoughts here Graham.
One thing to watch out for with this survey is that it only asks people that are still alive. This skews the average age of retirement lower in Graph 1 and Figure 6. While the average age of retirement has increased, it isn't as dramatically as it appears.
A couple of points:
The average age of retirement in 2004 is listed as 55.1 in Graph 3 on the ABS website (based on people alive today). If you look back to a 2005 survey, the average age of retirement in 2004 was 61.6. This increase to 64.3 in 2020 is less than 3 years, not more than 9.
The data includes (with a warning that it isn't statistically significant) an estimate that approximately 600 women retired in 1947 at an average age of 23 years who were aged 96 in 2020 (on average)

September 08, 2023

I'm 55 and looking to retire now. I am not of preservation age but according to the ATO website and conversations with the ATO I do not need to be. Using the Special Conditions of Release Clause on accessing ones Superannuation.

I have submitted an application for a ruling on my specific circumstance and have to wait up to 28 days for a response.

I'm sick of working and have more than enough to live off of earnings from the fund without touching the capital.

I could work longer, keep my Super invested longer and have even more money in 5 or more years but I lose something money can't buy, time. We are a long time dead. I don't see the point in dying with a big bag of money.

Curious bystander
September 08, 2023

I wish you all the best under the special conditions of release - a complex area particularly under preservation age. Assuming it is not a terminal benefit, just be comfortable with the tax on the taxable component.

Manoj Abichandani
September 08, 2023


Preservation rules are very strict - try under permanent disability.

I know someone who successfully proved himself to be "Mad" and not capable of working. He could convince two doctors that he had "Problems with life" and could not work again - the problem was permanent (Not suggesting you use this avenue).

Good Luck!
PS: I feel sorry for you as I was in your shoes about 5 years back - I am 60 now. I enjoyed the last 5 years working - what the heck! - My wife is your age - I dare suggest to her to take that route.......grinning...

September 12, 2023

This highlights the need to save some of your funds outside of super. If you want to retire early, you can use the non-super capital to live on until you reach the age where you can access your super. You may be paying more tax on your investment income outside of super while you are working, but in exchange you have a lot of flexibility in when and why you can access your money.

September 12, 2023

I don't wish appear rude here, however this response is the same for any similar type scenario posted.

The reality is circumstance can change for a person that alters their financial position, Divorce or Death of a Spouse being two notable ones.

September 07, 2023

I was forced to retire by a major Bank at just over 55 years of age. The method they used was to give me unachievable objectives (in my view) and then pressure and threaten me when I didn't achieve even one of the 20+ KPI's.

September 12, 2023

Your employer can't force you to retire. They can retrench / fire you.

What happens after that is up to you.

Warren Bird
September 07, 2023

Thanks Graham.
Some of this data provides interesting benchmarks for super funds seeking to understand their own membership in the context of delivering on the Retirement Income Covenant. It's on us funds to help members make the jolting transition that is retirement, in particular by making the financial adjustment as smooth and effective as possible.


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