‘New rhythm’: the boomers who are redefining retirement

For decades baby boomers have had an outsized impact on society, so it’s only natural that they are now reimagining what it means to retire as well.

“Retirement isn’t a gold watch and goodbye any more,” says Jo Brennan, Group Executive, Member Engagement, Education & Advice at Aware Super.

“It’s more like a winding road than a finish line. These days, more people are looking to strike a new rhythm in retirement - something that fits their life now, not just what came before.”

Australia’s retiree population is growing, and it’s estimated to reach 15-20 per cent of the overall population by 2030. That amounts to around 320,000 Aussies retiring every year, bringing some $86 billion in savings annually along for the ride.

For some retirees, it’s the perfect moment to leave the office behind, buy a caravan and never look back. But many are choosing to stay engaged in the workforce, whether by working a couple of days a week or volunteering.

Some retirees might find their passion and purpose in their career and don’t want to give that up. Others are reskilling into a different field altogether or stepping back from work to spend more time with adult children and grandkids.

“Retirement’s not just about kicking back any more,” says Brennan. “It’s about figuring out how you actually want to spend your time - what brings you joy, what gives your life meaning.

“More and more, we’re seeing Australians take a few swings at retirement. People are stepping out of work, then stepping back in - sometimes more than once.

“And with many of our members likely to live well into their 90s, retirement’s not a short chapter. It’s a whole new phase of life.”

These more flexible approaches to retirement are being driven by a range of factors. Aussies are living healthier lives for longer, but the rising cost of living and a post-COVID-19 rethinking of what people want from life are also having an effect.

Nevertheless, while Australians’ super accounts are growing, a gender gap remains at every age group, with the median super balance for women still substantially lower than for men.

In June 2022, the median balance for those aged 60 to 64 was $205,385 for males and $153,685 for females, a 25.2 per cent difference, according to research from the Association of Superannuation Funds of Australia.

This gender gap was forecast to continue “for decades to come”, a report from advocacy group Women in Super and consultancy Right Lane has found.

“On current trends, it will take until 2070 for all cohorts of women to have the same median superannuation balance as men,” it said.

Next year, super will be paid on top of the government’s paid parental leave scheme, a move that will “make a significant difference” for primary carers foregoing super while taking time out from work, according to Financial Services Council chief executive Blake Briggs.

“It plays a role in bridging the retirement savings gender gap and improving gender equality in Australia.”

Given the age of a one-size-fits-all retirement is all but over, it pays for retirees to think through their options.

Experts recommend taking stock of finances well before hitting retirement age and working through the financial impact of government benefits, including the age pension, and different tax incentives.

But in a sign that many people are not making the most of their super, research shows half of Australians have never accessed information about preparing for retirement.

“It’s concerning to see such a lack of engagement with information about retirement,” notes Mary Delahunty, chief executive of the Association of Superannuation Funds Australia (ASFA).

“It means many Australians may end up worse off than they should be in their post-working lives, simply because they haven’t been empowered with the relevant guidance.“

Aware Super’s Brennan says superannuation funds have a “massive role to play” in helping people shape the retirement they want.

“I always tell Australians - don’t leave it too late. Get involved with your super, ask questions, get advice. The sooner you start planning, the better chance you’ve got to build a retirement that really works for you - one with purpose, freedom, and your own rhythm.”

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.