The Four Types of Australian Retirees: Which One Are You?

By Darren Moffatt

June 12, 2024


Retirement is no longer just about leaving your job and ceasing to work. For many Australian seniors, the concept of retirement has evolved significantly. 

You might be wondering what retirement looks like for you in this changing landscape. The reality is, the definition of retirement varies greatly among individuals.

In Australia, the retirement age has shifted, influenced by factors such as superannuation access and age pension eligibility. 

According to the latest Australian Bureau of Statistics retirement intentions survey, the average retirement age in Australia was 64.8 years, with men retiring at an average age of 66.9 and women at 63.2. However, many people intended to retire at around 65.4 years.

What drives these retirement decisions? Financial security is the primary factor. For some, retirement is tied to their superannuation age, allowing them to rely on their savings. For others, the age pension is a crucial source of income. 

In 2022-23, the age pension was the main income source for nearly half of Australian retirees. While superannuation is becoming more significant, it’s not yet the primary income source for most.

[ RELATED POST: Living on the Aged Pension: Is It Enough for Retirement? ]

The Four Types of Retirees

In a recent opinion piece published by The Sydney Morning Herald, financial expert Bec Wilson explored the diverse world of modern retirement. She identifies four distinct types of retirees, each with their own approach to navigating this new phase of life. 

The first group, “Retirement Age = Superannuation Age,” includes those who have saved well and can afford to retire around the age of 60, relying mainly on their superannuation. These retirees are financially independent and don’t depend much on the age pension.

The second type, “Retirement Age = Age Pension Age,” combines a modest superannuation balance with the age pension, usually retiring at 67. This group uses the age pension as a key part of their income, enabling them to stop working full-time.

Then there are those who say, “Retirement? What Retirement?” These individuals love their jobs and choose to keep working, even as they become eligible for superannuation. For them, age is just a number, and they continue to find joy and purpose in their work.

Finally, there are the “Sweet Spot Strategists.” These retirees carefully plan to use both their superannuation and the age pension to maximise their income. They might retire a few years before the pension age, funding their early retirement years with superannuation and then transitioning to a combined income strategy.

Continued Engagement in the Workforce

Retirement doesn’t always mean completely stopping work. In fact, many Australian retirees continue to work in some capacity even after they retire. You might find that staying engaged in the workforce can bring numerous benefits to your life.

The Allianz report shows that 77% of pre-retirees are open to working after retirement. Out of these, 38% plan to seek part-time work. This continued engagement is not just about earning extra income—though that’s certainly a bonus. Working after retirement can provide:

  • Mental Stimulation: Keeping your mind active and sharp.
  • Social Connections: Helping you stay connected with others and avoid feelings of isolation.
  • Purpose and Routine: Making your retirement years more fulfilling.

Whether it’s part-time work, consulting, or pursuing a passion project, staying active in the workforce can give you a sense of accomplishment and satisfaction.

However, not all seniors have the capacity or desire to continue working. For those seeking alternatives to support their retirement, Reverse Mortgages offer a viable solution.

How Reverse Mortgages Can Help Australian Seniors Based on Their Retirement Type

Reverse Mortgages can be a valuable financial tool for Australian seniors, offering tailored benefits depending on your retirement type. 

Here’s how a Reverse Mortgage can support each group of retirees.

Retirement Type Description Benefits of a Reverse Mortgage
Retirement Age = Superannuation Age If you fall into this category, you’ve likely saved well and rely on your superannuation for income. However, unexpected expenses or a desire to enjoy a higher standard of living might strain your savings. Reverse Mortgage can provide additional funds without needing to dip into your superannuation. This offers financial flexibility to travel, renovate, or cover medical expenses.
Retirement Age = Age Pension Age For those who rely on a combination of superannuation and the age pension, managing finances can be challenging. This is especially so if there is still debt owing on the family home upon retirement, such that the recent retiree must still service the loan from a reduced income after ceasing paid employment.  Reverse Mortgage loans can be highly useful in refinancing any residual home loan or credit card debt. This obviates the need to continue with monthly repayments after retirement, on a limited income. Reverse Mortgage can also ‘top up’ your super or pension income, ensuring there’s enough to cover daily expenses comfortably and enjoy retirement without financial stress.
Retirement? What Retirement? If you love your work and plan to continue working past the traditional retirement age, a Reverse Mortgage can offer you peace of mind. In these cases a Reverse Mortgage ‘line of credit’ can serve as a safety net. It provides extra funds if you need to reduce working hours or face unexpected expenses, allowing continued work on your terms.
The Sweet Spot Strategists Well-planned retirees who strategically uses both superannuation and Age Pension entitlements at different times in the retirement life cycle, may have little need for a Reverse Mortgage unless in case of emergency. For ‘sweet spot strategists’ Reverse Mortgage can still be beneficial. It can help you maintain your financial strategy by bridging the gap to provide  additional income  during those few years before you qualify for the age pension, ensuring steady cash flow.

[ RELATED POST: When is a Reverse Mortgage a good idea: 8 top scenarios

No matter your retirement type, a Reverse Mortgage can be a flexible and effective solution to enhance your financial security. 

It’s important to consider how this tool can fit into your overall retirement plan and provide you with the peace of mind to enjoy your golden years.

Want to learn more about Reverse Mortgage? Download your FREE Reverse Mortgage GUIDE

Ready to Apply? You can now check your eligibility online or call Seniors First on 1300 745 745. 

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before you make any decision.

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