Realism vs reality - working part-time as retirees
Are you planning to boost your retirement income by doing some part-time work once you eventually retire? Perhaps you have included the expectation of some paid work in your calculations about how much you need to finance your retirement.
If so, this leads to another question: How realistic is that expectation?
A Vanguard research paper, Retirement transitions in four countries, may help provide some answers.
More than 5560 pre-retirees (who are planning to retire within 10 years) and recent retirees (who retired over the past 10 years) age 55-75 took part in the study covering Australia, the United States, United Kingdom and Canada. This includes 743 Australian pre-retirees and 703 Australian recent retirees.
In short, the researchers wanted to compare the expectations of pre-retirees with the experiences of recent retirees – including in regard to doing some work as a retiree.
Researchers found that pre-retirees were up to four times likely to say they expect to work in retirement compared to the proportion of recent retirees actually working. Consider the findings:
- Australia: Pre-retirees expecting to do paid work at least once a week in retirement (42 per cent). Recent retirees actually working at least once a week (11 per cent).
- United States: Pre-retirees expecting to do paid work at least once a week in retirement (42 per cent). Recent retirees actually working at least once a week (14 per cent).
- United Kingdom: Pre-retirees expecting to do paid work at least once a week in retirement (40 per cent). Recent retirees actually working at least once a week (10 per cent).
- Canada: Pre-retirees expecting to do paid work at least once a week in retirement (47 per cent). Recent retirees actually working at least once a week (14 per cent).
These findings raise another question: Why is there this gap between expectations to work in retirement and actually working?
"There are several possible reasons for this difference," the researchers write. "Pre-retirees may feel they need more sources in retirement, and so expect to work.
"It could also be true," they add, "that recent retirees had the same idea [as pre-retirees], but then, upon retiring, realised that the work was no longer necessary in retirement. Pre-retirees may also be overestimating their ability to find suitable work."
Whether retirees do some work much depends on such factors as employment opportunities, health and family obligations – and whether they actually want to do paid work after getting a taste for retirement.
A message is that you should be particularly cautious about counting on part-time work as a retiree to boost your retirement income.
Written by Robin Bowerman, Head of Market Strategy and Communications at Vanguard.
13 November 2017
vanguard.com.au
Latest Newsletters
Hot Issues
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
- Downsizer contributions can be time critical
- The superannuation changes from 1 July
- The Deadliest pandemics in History
- Winners & Losers
- Budget breakdown – Federal Government Analysis
- Federal Budget 2024
- Getting to a higher level of financial literacy in Australia
- What is the future of advice and how far off is superannuation 2.0?
- Investment and economic outlook, April 2024
- Australia’s debt service ratio ‘extraordinary’: CBA
- Connecting an adviser with your children
- ACCC scam report
- The Shortest-reigning Monarchs in History
- ATO warns trustees about increasing crypto scams
- Aged care report goes to the heart of Australia’s tax debate
- Removed super no longer protected from creditors: court
- ATO investigating 16.5k SMSFs over valuation compliance
- The 2025 Financial Year Tax & Super Changes You Need to Know!
- Investment and economic outlook, March 2024
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
October - December 2017 archive
- For the young it a question of engagement
- Address Under-insurance at Personal Finance Level - Global study
- Realism vs reality - working part-time as retirees
- SMSFs warned on ‘ticking time bomb’ with outdated deeds
- Statutory wills are underutilised in estate planning
- Resources on our site to help you, your family and your friends.
- Calls to Review ASIC's Definition of Lapse Insurance
- Paperwork bungles lead to $38k in payments
- Self-employed? Don't miss out on super
- Australian Dietary Guidelines and healthy eating chart (PDF)
- Big concessions looking likely for transfer balance limit: ATO
- Raft of superannuation measures enter Parliament
- US Fed policy: Normalisation begins
- What the gig economy may mean for your super
- Powerful Budgeting, cash flow and Super Tools available on our site.
- Australia's leading causes of death - ABS
- Government introduces first home scheme laws
- Are young investors wasting their youth?
- ATO granted super enforcement powers
- The great Australian (retiree) dream