The 2021 HILDA Survey
The Household, Income and Labour Dynamics in Australia (HILDA) Survey follows the lives of over 17,000 Australians each year.
It collects information on many aspects of life (eg household and family relationships, income and employment, and health and education), which, among other things, can be useful for public policy.
One of the 2021 HILDA Survey focus areas was the collection of retirement information such as timing of retirement, super balance at retirement, and prospective plans for retirement.
Below are several of the key findings on retirement from the 2021 HILDA Survey, plus links to useful content resources for additional information on the areas touched on.
2021 HILDA Survey findings
Trends in the age of retirement
Retirement from the workforce is one of life’s major events.
- In the period 2001-2004, 46.5% of men aged 60-64 and 68.4% of women aged 60-64 were retired. Whereas, in the period 2017–2019, it was 33% of men and 45.8% of women in this age range.
- In 2003, the mean age at retirement of recent retirees was 61.6 years for men and 61.0 years for women. Whereas, in 2019, it was 66.6 years for men and 65.1 years for women.
Prevalence of transitions out of retirement (returning to work)
Retirement is typically perceived to be a one-time event—people retire once, never to return to work again. However, this is not always the case, for one or a combination of reasons.
- In the period 2001-2004, 11.7% of retired men aged 60-64 and 7.3% of retired women aged 60-64 returned to work. Whereas, in the period 2017–2019, it was 7.7% of men and 4.1% of women in this age range.
Factors impacting on the timing of retirement
The timing of retirement is often influenced by a culmination of factors (eg financial readiness for retirement, health, employment opportunities, individual preferences, and the desire to coordinate with one’s partner).
- In terms of the impacts of life events on the probability of a person entering retirement, the following rated high for men and women: turned 65 in the last year, in poor general health in the year prior to the current year, death of spouse or child, fired or made redundant by an employer, and partner retired in the last year.
- The main reasons for retirement of persons who retired within the preceding four years: involuntary job-related (eg made redundant), own poor health, poor health of another (eg partner or other family member), voluntary family/life (eg partner had just retired), and voluntary financial (eg eligible for Age Pension).
Superannuation of retirees at the time of retirement
Our retirement income (and outcome) can be affected by the sources of income (eg retirement savings) we can and are able to draw from—and how we use them. For many, super forms a key part of retirement savings.
- In the period 2011-2015, the proportion of retirees who had super and the subsequent mean super balance at retirement was 80.8% and $475,259 for men and 84.9% and $253,027 for women. Whereas, in the period 2015-2019, it was 80.9% and $476,744 for men and 88.1% and $289,277 for women.
- In the period 2011-2015, the proportion of retirees who spent at least some of their super at retirement (eg paid off debts, paid for large-expenditure items, or assisted family members) was 12.7% for men and 16.9% for women. Whereas, in the period 2015-2019, it was 16.3% for men and 14.7% for women.
Retirement expectations of people not yet retired
Everyone has different financial situations, goals, and objectives—this is coupled with differing ideas and expectations, particularly around retirement. However, at times, there can be similarities.
- In 2011, the mean self-reported (by non-retired persons aged 45+) expected annual after-tax income required for a satisfactory standard of living in retirement was $49,963 for singles and $67,715 for couples. Whereas, in 2019, it was $46,752 for singles and $69,052 for couples in this age range.
- In 2003, the mean expected and preferred retirement ages of non-retired persons aged 60-64 was 66.2 years (expected) and 64.5 years (preferred) for men and 65.9 years and 63.6 years for women. Whereas, in 2019, it was 67.4 years and 65.1 years for men and 66.7 years and 64.9 years for women in this age range.
- In 2003, the proportion of non-retired persons aged 60-64 not expecting to retire and preferring to never retire was 12.8% (not expecting to retire) and 14.2% (preferring to never retire) for men and 13.7% and 18.1% for women. Whereas, in 2019, it was 8.2% and 3.4% for men and 6.2% and 4.9% for women in this age range.
When it comes to retirement wellbeing and security, it’s key to remember that everyone has their own financial situation, goals, and objectives, which also means our ideas and expectations about retirement can differ.
Therefore, in terms of securing your own retirement wellbeing and security, taking time to understand your financial situation, goals, and objectives—and having an appropriate retirement plan in place—is a step in the right direction.
For more information about this topic, contact Carrick Aland’s Wealth Planning team on 1300 466 998 or visit carrickaland.com.au/wealth-planning/.
Disclaimer: This has been prepared by the IOOF Research team for Millennium3 Financial Services Pty Ltd ABN 61 094 529 987, AFSL 244252. Millennium3 Financial Services Pty Ltd is a company within the IOOF group of companies consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This report is current as at the date of issue but may be superseded by future publications. The information in the report may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Millennium3 Financial Services Pty Ltd. This report may be used on the express condition that you have obtained a copy of the Millennium3 Financial Services Pty Ltd Financial Services Guide (FSG) from the website. Millennium3 Financial Services Pty Ltd and/or its associated entities, directors and/or its employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this report, or may provide services to the companies referred to in this report. This report is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Millennium3 Financial Services Pty Ltd. Millennium3 Financial Services Pty Ltd and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. This report has been prepared in good faith and with reasonable care. Neither Millennium3 Financial Services Pty Ltd nor any other person makes any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this document (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law Millennium3 Financial Services Pty Ltd, its related bodies corporate and their respective officers, employees, representatives and associates disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this report. General Advice Disclaimer: The information in this report is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this report, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before you acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance. For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.