A good article from the Sydney Morning Herald by Bec Wilson on working and retirement. Older people are working longer but keep in mind, if they’re on the tools, chances are their shoulders and knees are shot. While it’s not one-in-one out, people over 65 who work into their 70s, reduce entry demand for young people.
Once upon a time, early retirement was the dream. You’d leave work at 55, buy a caravan, and spend your days fishing, golfing, playing bowls, or watching sunsets you’d finally have time to enjoy. But as 2026 looms, that fantasy is starting to look … well, a bit outdated.
The smart money’s on working later and not because we have to, but because it makes everything about retirement work better. Australians are living longer, healthier and, crucially, more flexible lives.
The average 65-year-old today can expect another 20-plus years of good health. That means retirement isn’t a finish line any more, it’s a long, evolving stage of life that can last three beautiful decades.
According to KPMG’s analysis of the ABS Labour Force Survey just released, the expected retirement age for Australian men has climbed to 67, and for women to 65.3 both now the highest in history.
That’s not just a reflection of cost-of-living pressure; it’s evidence that people are staying engaged in the workforce, redefining what work looks like for themselves, and using their superannuation more strategically to create a life they want.
And with life expectancy for the median 65-year-old now 88 for men, 90 for women and 94 for a couple, why would you stop work you enjoy before you have to? (King note: this applies to people born now and not in the 1950s)
Turns out that working longer – if you’re doing something you enjoy – isn’t just good for your finances, it’s good for your health.
KPMG also found that the gap between when Australians leave full-time work and when they fully retire has stretched to nearly three years. In that time, many are doing exactly what this new generation of retirees does best – easing out of work on their own terms, making their prime-time count before heading off into their epic retirement.
New data from ASFA tells the same story. Around 45,000 Australians aged 60–64 retire each year, 65,000 aged 65–69 and 40,000 aged 70–74. But older Australians are working longer than ever – workforce participation has climbed to 54 per cent of men and 43 per cent of women in their 60s, and even among those in their 70s, about 14 per cent of men and 9 per cent of women are still earning.
Most of the growth in retiree numbers over the past decade has come from people aged 70 and over, while the number of Australians retiring before 60 has steadily declined since the late 1990s.
ASFA’s analysis shows that fewer people are leaving work early, and more are retiring at 65 or later, particularly in their 70s. Some of this is simply demographics, with the baby boomer generation moving through, but it also reflects a clear behavioural shift.
Older Australians, especially women, are staying in the workforce longer than ever before. Two decades ago, women in their 60s rarely worked past retirement age; today, nearly half do. It’s a quiet revolution, reshaping what retirement looks like in Australia.
Financially, working a few more years, even part-time or casual, is one of the most powerful levers you can pull for more financial security. Every extra year of income gives your super more time to grow and means less years drawing it down at a higher pace.
And, the compounding effect of having more funds in your account for longer is enormous in this stage of life. Delay tapping your super for just two years, and you could have tens of thousands more saved and fewer years to stretch it across.
It’s also tax-smart. Once you hit 60 and give up a job, even briefly, you can move your super to the retirement phase and start drawing from it tax-free. And by 65, you don’t need to stop working at all; the rules let you access it tax-free either way.
Ceasing gainful employment once to meet the criteria, doesn’t mean you can’t keep working – it just means you can’t stay in the exact role you left to access your super. That means you can layer your salary and draw a tax-free income stream from your retirement phase superannuation account.
Then you can pay a little less tax, and put more into super in those years, maxing out your concessional contribution cap of $30,000 into super during this phase if you can afford to at just 15 per cent tax and let it compound longer in a low-tax environment.
Meanwhile, if you’re eligible for the age pension from 67, the income-free area for couples is now $380 a fortnight, or for singles $218, and the Work Bonus lets older Australians earn an extra $300 per fortnight each without reducing payments.
In short: a little part-time income goes a long way – allowing your super to compound longer and you to keep one foot in a workplace you might not be completely ready to leave.
And let me be clear, this isn’t about clocking in at a job you hate. It’s about creating flexibility, purpose, and a better way of using your retirement savings in the earliest stage of your retirement so you can live a longer, better quality of life.
Many Australians are reinventing work in their 60s – starting consultancies, freelancing, working in tourism, caring or community roles, or pursuing creative projects that finally pay something back.
Some call it semi-retirement. I don’t think everyone is ready to embrace it as “retirement” though – preferring to live in a midlife transitional phase, enjoying a more carefree period while staying employed, but adjusting the structure of work in their life.
Working later also has huge emotional and cognitive benefits for those who get to choose. Staying socially and mentally active can delay cognitive decline and boost wellbeing. It turns out that working longer – if you’re doing something you enjoy – isn’t just good for your finances, it’s good for your health.
We have to give credit where it’s due. The real reason Aussies in their 50s and 60s and even their 70s today can consider taking a more flexible approach to working is because of superannuation. It’s the quiet hero behind this shift.
For the first time, Australians are entering retirement with enough super to give them real choices – if they dare to learn how to use it. A comfortable retirement now costs around $75,000 a year for a couple or $53,000 for a single person.
And for the first time, more than 30 per cent of Australians are retiring with the capacity to fund that level of lifestyle, a figure ASFA expects will rise to around 50 per cent by 2050 as the system matures.
The beauty of super, once you reach the retirement phase, is its flexibility. Some people use a transition-to-retirement strategy to access tax-free income; others move straight into a tax-free drawdown phase.
Either way, that access to an income stream allows you to scale back work without sacrificing income. It’s the foundation that makes a slower, softer exit from the workforce not just possible but financially smart.
So forget the old formula of “work hard, retire early, hope it’s enough”. The new version looks more like this: work smarter + ease out of the workforce gradually + enjoy your life sooner. Because the real goal isn’t to stop working early – it’s to stop working for necessity, and start working for joy.
After all, my definition of retirement is this: it’s the moment you stop trading time for money, and start trading it for happiness, fulfilment and purpose.