“Recently my twenty (almost 30) something children looked at me blankly when I mentioned actress Diana Rigg. “Who’s she?” came their collective response. It seems even the sixties icon of The Avengers, Diana Rigg as Mrs Emma Peel, can reach her use by date.
But Australia’s older citizens, from Prime Minister John Howard down, have every reason not to rush retirement. Census 2001 shows that Australians aged over 85 have grown by a third in the past five years while decreasing numbers of younger taxpayers pick up the tab.
Working longer is one way of paying for a longer life and enjoying it.
That attention grabbing cohort of boomer gogetters is fading into middle and old age. But not without a struggle. Treasurer Peter Costello’s 2002-03 Intergenerational Report echoes the 1994 EPAC report, Australia’s Aging Society, in warning of the cost to the taxpayer of our aging society. People eligible for the Age Pension will double by 2041-42. Aged care spending as a proportion of GDP will more than double by 2041-42.
Yet an older Australia doesn’t have to be a poorer one. Unlike the very young, older citizens can, and indeed will have to, become more self sufficient. And there is incentive to do so. Lifestyles on Aged Pensions, or pension top ups to modest superannuation entitlements, are unlikely to satisfy the average baby boomer for long – conditioned as he or she has been to regular and costly leisure pursuits, travel and homes equipped with technological aids from cars to computers.
Superannuation retirees will get around half their pre-retirement income. Aged pensioners can expect almost 78 per cent of pre-retirement income, but this is some 54 per cent less than for better off retirees.
Recent figures from the Bureau of Statistics show older workers are already trying to earn while they can. More are keeping jobs or looking for work at much older ages.
Just over half of all women aged between 55 and 59 were in the workforce between 2001-02 – a generation before it was half that number. Twenty-three per cent of women aged 60-64 still work compared to 11 per cent two decades ago. Participation rates among male workers aged 60-64 is at a seven year high. Activity rates among workers over 65 are the second highest on record.
Allen Consulting Group co-chairman Dr Vince Fitzgerald believes (The Age, 17 May 2002) that paying for the increased costs of an aging society lies partly with reversing “the trend to early (often involuntary) retirement that we have seen over the past few decades”. He’s optimistic older citizens can retain paid work as “younger workers will be increasingly scarce”.
Without a rapid increase in immigration numbers, Australia will shortly develop a workers’ market, with older workers attractive to employers. With older generations working longer, Aged Pensions costs to government would be cut and while superannuation contributions would increase.
Retirees and older workers not only face longer lives today, but healthier ones. Even now, the bulk of health costs for the elderly comes with hospitalisation, usually in the two years prior to death. For the rest, aging is a slowing down but not incapacity.
Most over 60s enjoy fruitful and active years and contribute, both financially and in kind, to the wider community. Older people are twice as likely to give money to their families than receive it. Older Australians have accumulated significant wealth to be passed on in inheritances. In the 1990s, more than $140 billion was owned by Australians aged over 65 and asset holdings of the retired, including those aged between 55 and 65, amounted to over $200 billion. Australia is about to see the biggest transfer of wealth in its history.
Older parents continue to act as childminders, and assist families in financial, emotional and other practical emergencies. Older citizens are the backbone of volunteer and community services and gain vitality and contact through the contribution they make.
And while economists and treasurers warn of the costs from unchecked old age dependency, the numerically strong older generation is already winning concessions. In 2001, John Howard gave generous handouts to self-funded retirees. Now a retired couple on $52,800 effectively pays no tax. Even Simon Crean has promised to lower the contributions tax on superannuation. Governments recognise self sufficiency in retirement might be the greatest saving of all.
And if it’s good enough for the Prime Minister to work while he can, why not over 60s in the electorate at large?”
Article published in The Courier Mail