Once the Australia's typical retirement scenario was quite simple - people paid off their home mortgage and then around age 60 decided to give up their full-time job and retire from the workforce.
While this scenario of course still exists, now a growing number of Australians are working longer until later in life, including on a part-time basis.
Some of these older workers are paying off housing debt and at the same time seeking to build a nest egg that will provide them with a more comfortable retirement, while others are simply enjoy still being part of the workforce.
The good news is that there are a range of government incentives to help older workers.
In the story below, we'll explain the current trends and some of these incentives.
Moving towards the 'unretirement' era
There is no question that Australians are working later in life.
In January 2018, 13 per cent of Australians aged 65 and over were part of the workforce, compared to just eight eight per cent in 2006.
Research shows that Australia's housing market is playing a major role in this trend.
According to a report by the Australian Housing and Urban Research Institute, rising levels of mortgage indebtedness - along with the fact that Australians are simply living longer and are more comfortable with debt - is a key factor behind the rising rates of older workers.
At the same time, a growing number are Austalian over 50s are transitioning to flexible work arrangements before they finally decide to lay back and take it easy.
According to the Australian Bureau of Statistics, these days, more people work part-time before they retire (37 per cent of the labour force), than those who work full-time before they retire (34 per cent).
Find a job if you’re a pre-retiree and unemployed
If you are over 45 and on an income support payment through Centrelink, you can get help to build your job skills and confidence with the Career Transition Assistance (CTA) Program. This government initiative has just received a $41.7 million funding boost that will be put into strengthening services over the next three years.
The government’s older worker program, Restart, is also weighing the odds in favour of over-50s who have been on income support for six months and are registered with a JobActive organisation, with businesses who hire these workers receiving up to $10,000.
Earn money in the gig economy
Don’t forget side hustles either, otherwise known as the gig economy. A 2019 study found 13.1% of Australians, including older people, had done work such as odd jobs, transport or even professional services through digital platforms like Uber and Airtasker. Income earned this way must still be declared to the Australian Taxation Office.
If you’re thinking of making money from a hobby, like arts and crafts, look for a retirement development offering a super-sized garage.
Get a full pension and keep working
Even if you are eligible to receive the Age Pension, you don’t need to let it stop you working and enjoying some extra income. Age Pension rules support part-time and casual work through the combined application of both the pension income test and the Work Bonus.
According to the pension income test, a single pensioner can now earn up to $178 a fortnight and couples earn up to $316 combined without it affecting their pension. However, the Work Bonus provides those on the Age Pension with an incentive to work a little bit more and keep their pension. It states that the first $300 of fortnightly income is not counted under the pension income test.
This means a single pensioner with no other private income could earn up to $478 a fortnight from work and still receive the maximum rate of pension. The Australian Taxation Office can provide more information.
Get a tax cut
For 2018-19 returns, taxpayers will get up to $1,080 in tax relief, depending on their income, cutting out at $126,000 in wages or salary. From 2024-25, the government also intends to reduce the 32.5 per cent marginal tax rate to 30 per cent and abolish the 37 per cent tax rate bracket.
Meanwhile, the Seniors and Pensioners Tax Offset (SAPTO) allows Australians over 65 to take advantage of a $2,230 tax offset for annual incomes up to $32,279 and then a lower offset amount which extinguishes at an income level of $50,119.
Retirement communities changing to meet the needs of older workers
As well as changing the work landscape, older workers are having a noticeable impact on retirement communities.
It is now possible to move into what is traditionally regarded as a 'retirement community' and at same time continue to undertake either full-time or part-time work.
In fact, many retirement communities are now providing home offices in new dwellings.
Always get independent financial and legal advice before making decisions that affect your financial future.
Helen Hawkes is a business and lifestyle journalist who has written for clients including CPA Australia, Westpac, Colonial First State, The Australian Financial Review, QSuper and the Australian Institute of Superannuation Trustees. She has bought and sold five houses and is currently planning a comfortable retirement.