Planning for semi-retirement

Semi-retirement: the best of both worlds

If you’re thinking of working beyond your retirement age, you’re not alone. Recently about half our SASS members told us they are planning to keep working longer than they expected¹, which is in line with the national trend. Australians are retiring later now than they have for the last 50 years: the average age for men is now 66.2 and for women it’s 64.8².

Also, research shows that only 20% of people aged over 55 see retirement as a one-off event³, and are instead planning for a series of phases where paid work gradually takes up less time.

But continuing with paid employment into your 60s and 70s doesn’t have to be a full-time commitment. Many people are finding that semi-retirement gives them the right balance between spending time on personal interests and achieving financial stability.

The motivation to keep working

Less than half of Australians retire simply because they have reached the age where they can access their super⁴. 

We’re living longer, healthier lives so the prospect of being retired for thirty years or more can be a good motivation to keep working at least some of the time. The government is also contributing to the trend by steadily pushing out the age at which you can access the Age Pension.

Since COVID, changing employment patterns now allow for more part-time and remote work opportunities, giving pre-retirees more options to boost their finances for their future in full retirement. Between 2019 and 2022, one-third of new jobs went to people over 55.⁵

The benefits of semi-retirement

There are lots of reasons to stay in the workforce, including giving a purpose to your day, a social outlet and, of course, an income.

But while finances are important, people often choose semi-retirement because priorities change as you get older: you may want to spend more time with family, support a cause by volunteering, or follow a passion. Or maybe your career has a physical component that is more challenging for you as you age, but you still have lots of skills and experience to contribute.

Consider an 'encore career'

An ‘encore career’ is where people close to retirement choose to work in a new area, often in less demanding roles. These second careers offer a way to stay active and connected, and many use it to contribute to something meaningful to them. In 2018-19 almost 200,000 Australians went back to work, either for financial reasons or simply for something to do,⁶ and those figures are before COVID created more opportunities for older workers. 

For example, a teacher might find work as a casual tutor in a community centre, or a police officer could become a security consultant for local businesses. Some people take the opportunity to try something completely different from their previous career. In 2021 there were around 50,000 Australians aged over 50 studying for a tertiary degree⁷.

How to make semi-retirement work for you

If you like the idea of semi-retirement but feel unsure about what do next, an Aware Super planner can review your circumstances, talk you through each option, and help you make more informed decisions.

¹SASS Wise Edition 9 https://www.retire.aware.com.au/superannuation/state-super-members/sass/sass-wise/edition-9

²KPMG When will I retire  23 February 2023 https://kpmg.com/au/en/home/media/press-releases/2023/02/when-will-i-retire-educated-aussies-choosing-work-longer-23-february-2023.html

³Smart Co The future of global retirement 2023  https://www.smart.co/future/retirement-perceptions-aus#retirement-is-a-fluid-concept-3

⁴Australian Bureau of Statistics 8 May 2020 Retirement, and retirement intentions Australia https://www.abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release

⁵KPMG When will I retire  23 February 2023 https://kpmg.com/au/en/home/media/press-releases/2023/02/when-will-i-retire-educated-aussies-choosing-work-longer-23-february-2023.html

⁶https://www.afr.com/wealth/personal-finance/when-it-s-time-to-retire-according-to-three-experts-20230130-p5cght

⁷Education.gov.au Higher Education Statistics 2021 https://www.education.gov.au/higher-education-statistics/resources/2021-section-2-all-students

The information contained in this article is given in good faith and has been derived from sources believed to be reliable and accurate. No warranty as to the accuracy or completeness of this information is given and no responsibility is accepted by Aware Super Pty Ltd or its employees for any loss or damage arising from reliance on the information provided.

Personal advice requires the provider to act in the client’s best interests and take into account the client’s circumstances. These rules do not apply to general advice. This communication contains general advice only and no personal advice. We have not taken into consideration any of your objectives, financial situation or needs or any information we hold about you when providing this general advice. Further this communication does not contain, and should not be read as containing, any recommendations to you in relation to your product. Before taking any action, you should consider whether the general advice contained in this communication is appropriate to you having regard to your circumstances and needs, and seek appropriate professional advice if you think you need it. Contact us to make an appointment to see one of our representatives. You should also read our Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making a decision about Aware Super. These documents are available on our website at Product Disclosure Statements (PDS) and Target Market Determination (TMD) | Aware Super or call us and we’ll send you a copy. Issued by Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, the trustee of Aware Super ABN 53 226 460 365. Financial planning services are provided by our wholly owned financial planning business Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430. You should read their Financial Services Guide before making a decision. View the general advice warning and conditions of use for this website.