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Most Australians will be affected by the recent change to the retirement policy and the corresponding age for the age pension. This change was communicated by the Federal Government for the first time to the public on today’s date in the Federal Capital Canberra. This is the first time in the last 10 years that the policy has been revised.
The Revision of the Age Association
The change comes into effect immediately and as such, Australians will now need to be 68 years old to claim the Age Pension. The government has implemented a system to transition people over the coming 5 years and understand that a pension is a right and for people close to retirement, they will have time to prepare. The ruling suggests an increase in life expectancy and the need to keep the pension financially sensible.
Reasons for the Change
The years have seen an increase in the life expectancy of retirees which has ultimately added to the pension bill, thus, creating a burden on the nation’s economy. Government ministers have adjusted the age to allow people to still retire comfortably and ease any monetary worries. In the long run, the changes will bring relief without compromising the pension policy.
Concerns From The Community
Many advocacy groups and unions have made public their concerns about the announcement and have warned that many older Australians, especially in physically demanding and manual labour positions, may struggle to remain employed until the age of 68. “How is someone in construction or someone in healthcare supposed to keep working, if their body is not able to keep up?” one union representative stated.
Effects On Retirement Planning
Changes to the legislation mean that Australians, along with the rest of the world, are going to need to start planning their retirement much more in advance. They will also need to save more –particularly into their superannuation and private secondary retirement investments. Financial planners are advising Australians in their 50’s and 60’s to start reassessing their retirement plans as the time to build up the private savings is before the pension becomes available. Adequate preparation needs to be made in advance as working-class families will suffer the most from not having the pension.
| Year | Pension Age |
| 2023 | 67 |
| 2025 | 67 |
| 2030 | 68 (proposed) |
| 2036 | 69 (suggested) |
| 2050 | 70 (suggested) |
Government Response
The government stands by their claim that the appropriate measures will be put in place to protect the most vulnerable. Additional measures are likely to be put in place for Australians who, for health or other reasons are not able to stay in the workforce. They have also pointed out that the gradual implementation of the policy will help industries and the public adjust over time.
The Road Ahead
Much has also changed in the sentiment of the older populace, who now also bear the impact of the legislated neural pension age. Apart from maneuvering the strain of the additional age to retire, the older populace are also equipped and confident to conquer additional challenges. One thing is unquestionable and that is the importance of retirement planning, which now also includes divisions in superannuation, is pressing across many of the Australian families.