Australians must work past the traditional retirement age of 60 to balance Australia's budget deficit and the cost of the age pension, says the Financial Services Council (FSC).
The 2015 joint FSC-CBA Older Workers Report found that with every additional year Australians work beyond the retirement age a further $200 billion is added to retirement savings.
FSC chief executive officer Sally Loane said, “For Australia to remain prosperous into the future, we're certainly going to need this work cohort working for much longer into their lives.”
Ms Loane argued that keeping people employed for longer has a flow-on effect into the economy through taxes, productivity and higher spending.
“The federal government has made it clear that our nation needs older workers as it benefits their wellbeing, the economy and the broader community,” she said.
“For the economy, we are going to need older people working for longer. It's an economic imperative, it's not negotiable anymore.”
As more Australians move into the older worker category, participation rates among those aged 65 and over are projected to increase from 12.9 per cent in 2014-15 to 17.3 per cent in 2054-55. Finding ways to keep them employed is imperative.
CBA's general manager of retirement, Nicolette Rubinsztein, pointed out that one in three older Australians said flexibility will encourage them to continue working.
“Flexible working arrangements have played an important role in encouraging older workers to stay in the workforce, allowing them to maintain a healthy work/life balance and provide the freedom and financial means to attend to their personal and family needs,” Ms Rubinsztein said.
The report also found that 71 per cent of older workers have no concerns about remaining at work, with 72 per cent keen to keep working regardless of their financial situation.
“Australians’ attitudes towards retirement are changing,” Ms Rubinsztein said.
“No longer is the road to retirement such a defined path, but providing older workers with the support and flexibility to continue working until the time is right for them to retire and for reasons they choose,” she said.
“Importantly, supporting older workers in the workforce is paramount to addressing our longevity challenges and maintaining the health of our retirement system.”
Ms Loane pointed out that while it is beneficial for the age group to remain at work, policy needs to address issues such as preservation age and age pension age.
“For a lot of people it is feasible to work into their 70s, but for a lot of people it really isn't,” Ms Loane said.
“How fair is it to restrict access to superannuation for people who literally for health reasons cannot work any longer?”
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