The typical retirement age in Australia is 62.9 years1, yet some older Australians are choosing to work well into their 60’s and 70’s. In fact, in 2018, Australians aged 65 and over had a workforce participation rate of 13%, compared with only 8% in 20062. So, why is workforce participation over age 65 increasing?
There are many lifestyle factors that will impact an individual’s decision on when to retire.
According to the Work well: Retire well report, the top five main reasons why workers aged 65 and older keep working, are:
- 41% work for financial needs
- 15% work for personal enjoyment and satisfaction in their work
- 12% don’t feel ready to retire
- 10% work to keep active and busy
- 10% work to make use of skills and experience.
As a people manager it’s important to have an understanding of the short and long-term career pathways of your employees. And for some of your older employees, if retirement is part of their short-term plan then it’s important to be able to discuss this with them.
So, as an employer, how do you talk to your employees about retirement?
‘Have you considered these options …’
Consider alternatives that allow older employees to continue working for your organisation but in a different capacity. Perhaps setting up a mentoring program for those nearing retirement to pass on their valuable skills and experience to younger and less experienced staff.
You might be able to offer flexible working arrangements. Older employees nearing retirement can be frightened by what their life will look like when they’re not working every day. Flexible working arrangements such as working part-days or cutting down to just a few days each week might allow them to get a taste of what retirement might be like.
‘What are your plans for the next three years?’
Some older employees fear that the minute they mention the word retirement their employer will be pushing them out the door. Let your employees know it’s okay to talk about retirement. Consider starting a conversation with, ‘What are your plans for the next three to five years?’ rather than, ‘When are you going to retire?’. You can then discuss the options available without them feeling like their working-life is ending.
Let Tasplan help
We offer education sessions at your workplace to talk to your employees about their super options to prepare them for retirement. We even have a specific session on transitioning to retirement. With a transition to retirement strategy employees can access some of their super while they’re under 65 and still working. By topping up their take-home pay using pension payments from super, a transition to retirement strategy can help employees ease into retirement. It may also help to grow their super faster, or allow them to work less without reducing their take home pay before they retire. It’s all about making them feel financially secure enough to make the decision to retire.
And when they’re ready to retire, we can explain the Tasplan Pension options and their features. And if they’d like more help, we can even set them up with one of our financial planners. Whichever Tasplan Pension option they choose, we make it easy for them to feel in control of their money.
One final thought, be mindful about focusing on age when it comes to discussing retirement with your employees. There’s no legal retirement age in Australia, it’s simply when someone feels they’re ready, or are no longer capable of working. So, try not to focus on a person’s age, but their emotional, physical and financial readiness to retire.
1 The average age at retirement for recent retirees (those who have retired in the last five years) was 62.9 years. 6238.0 - Retirement and Retirement Intentions, Australia, July 2016 to June 2017. https://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0. Accessed 6 August 2019.