Working in retirement now in much greater demand ★ Retiring soon - six big things to think about ★

Want to work in retirement? Finally employers need age and wisdom, whether younger managers like it or not!

For a long time, ageism and employer bias towards younger people has been the number one barrier to older people seeking employment in retirement, or prolonging their pre-retirement years. It probably still is, but the current state of the labour market in Australia is changing the balance of power, and maybe it’ll change the trends. You can now work if you want to.

There is 431,600 vacant jobs in this country right now. Employers are struggling to fill roles they need desperately to operate and expand their businesses and teams are overworked and more willing to accept help from older peers. Proactive retirees with good experience are finally in demand for both sophisticated and unsophisticated roles. Could this be a significant shift to workplace attitudes that sets up a more multi-generational workforce for future generations? Can you take advantage of the shift and work while you’re retired in a job you’ll be challenged by? And if you do, what will it mean for your superannuation, pension and concessions? I answer all of these questions below. It’s a long one today, so keep scrolling if it’s not for you - there’s more below.

There is no luxury of choice for employers in today’s recruitment markets. In fact, many employers I know will privately admit they are having to ‘take what they can get’. And this is playing very well into the hands of proactive middle and older generations who might otherwise have been blocked from opportunities in preference for younger candidates. 

And retirees are eating this opportunity up, with Australian Bureau of Statistics data showing that 40,600 more workers over 65 were employed in February this year than the same month last year. That’s quite a few!

In the era of rapid technology advancement, everyone assumed young people knew best. But in a tricky economy, you need people with commercial experience, networks and connections, and business acumen to lead businesses through the unknown and expand into opportunities. We all know that comes from the more experienced and mature people in the workforce. 

Andrew Brushfield, Director at Robert Half has been focussed on uncovering talent in the mature market to help combat Australia’s human resource deficit. He says companies are increasingly looking for retirees to step back into the workforce, to fill higher-level and specialised roles. He says employers are valuing older people and retirees for their ability to bring specialist experience and step in and contribute quickly to a company or role. In fact, according to Robert Half’s recent employer survey, 58 percent of employers have hired someone who retired but has since returned to the workforce in the last year and 37 percent of employers who have not hired a retiree would consider it. 

Barb Cosson, Co-founder War on Wasted Talent speaks with greater frustration. She points out that we need to start thinking about older people in the workforce differently and hopes these trends Andrew speaks of really do exist. “Many younger managers find it challenging recruiting older and more experienced people into their teams who seem ‘overqualified’.”

She voiced her frustration at just how important it is that HR Managers drive and educate for change. “Those recruiting seem to find it hard and can’t really believe that many of these people at retirement age don’t actually want to rise up and be the boss anymore. That they might be happy with more flexibility and content using their skills built over a long and worthy career in this different phase of life. It’s time to recognise that someone can have moved past the pinnacle of their career and still be enormously valuable to businesses and teams.”

“They don’t necessarily all have to go and work at Bunnings after they’ve peaked either,” she remarked. “Bunnings is a great employer of older Australians but there’s so much more to be done.”

The debate is an important one. With 3.5% unemployment in May 2023, problems around staffing businesses are here to stay. In fact, Simon Kuestenmacher, Co-Founder of the Demographics Group said in a recent presentation that economic signals show the employment market will likely remain this tight for ten years or more and some sectors will need older workers to fill their workforces. 

This could be the perfect opportunity to integrate older Australians better into our workforces. It requires older generations to want to keep working - maybe not full time, but in ways that can contribute valuably to businesses.  

So if you’ve retired and want to work, what do you need to worry about? 

For those who’ve declared retirement, willingly or unwillingly, getting back on the employment horse can be daunting and can cause other issues with your more passive income sources they fought hard to get in place to be retired. So let’s explore what it can mean to do so. 

What does it mean for your Superannuation?

To become eligible to draw down your superannuation as an income stream or lump sum, you need to either reach preservation age, or declare yourself ‘retired’ at some point in time. Once you have declared you are retired, you usually shift the money in your superannuation fund from accumulation phase to retirement phase, and start drawing down an income that is tax-free. Once you are in retirement phase, you have to draw down the mandated minimum drawdown rates every year. 

Image: Mandatory superannuation drawdown rates have reverted to pre-Covid levels on 1 July 2023.

If you start back in the workforce, you actually have to start contributing to your superannuation fund again, which means if you have converted all your super into retirement phase, you will need to open another accumulation account inside your fund. This can co-exist with your retirement account. As long as you are under the age of 75 you can keep contributing to your superannuation accumulation account through work and drawing from it via the retirement fund at the same time. At a later stage, you can convert this second accumulation account into an additional retirement account in your fund.

“Practically, if you think, when you retire that there’s a chance you will go back to work afterwards, keep some money in your accumulation account, to keep it open, and roll some over to your pension,” said David Lane, Senior Private Wealth Adviser and State Manager QLD for Ord Minnett. 

“Once it is in the pension/retirement account you are required to maintain that mandated pension drawdown. Technically, David says you can switch it back to accumulation, although I’ve never seen that happen. And if you did, you would then have to start paying tax on your super again.” 

What does it mean for your pension eligibility?

If you have reached the pension age of 67 and qualified for either a part or full pension, you’ll want to properly understand the Pension income test free area, which allows you to earn $180 per fortnight as a single person or $320 as a couple; and the Pension Work Bonus which allows you to earn up to $300 per fortnight or $7,800 per year from wages that is not counted under the pension income test.  There’s also a one-off increase to the work bonus in 2023 calendar year of $4000.  Once you’ve hit these limits, the pension falls away based on the income test (or the assets test if you trigger it). 

What does it mean for concessions eligibility? 

Concessions are offered to you based on your eligibility for the Age Pension, for the Pension Concession Card, or the Commonwealth Seniors Health Card, which is calculated off the same framework as the Pension income test, with higher thresholds. Seniors Cards in most states also limit a lot of their concessions to people who work less than 20 hours per week, so be aware of some of the valuable concessions you might miss out on. 

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The conclusion I draw is the world is still a little jumbled up in older employment. The work, if you want it, is apparently out there and begging for employees to do it. Ageism still exists in industries where youth is beautiful. So if you want challenging and exciting work, the work you find might not be in the same industry you grew up in, but there’s certainly opportunities to use the valuable and hard-learned skills of older Australians in and out of retirement. 

Have you had an experience as an older employee, positive or negative, that you can share?  Tell your story in the comments on the article. 

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From Bec’s Desk this week …

On a more personal note, this week I’m headed to Uluru and King Canyon on a tour with Intrepid Travel. Keep an eye on my Instagram and Threads accounts for a detailed view from the exciting journey in pictures. I’ll fill you in on my group holiday experience when I return, ready and itching to launch my book into the world on the 26th July. (I’m more than a little excited now).

Thanks to everyone in the Epic Retirement community for your enormous support and enthusiasm. I love getting all your emails about the stories and how you’ve experienced similar or contrasting things. You can email me at bec@epicretirement.com.au with any feedback, ideas or insights you have. I try hard to reply to everyone!

I would love your help - I’m keen to find more people with truly epic retirement stories other people can learn from or be inspired by to speak on my podcast, Retirement Diaries. Aidan starts on the Epic Retirement team next week to improve my podcasting audio - something I know is dearly needed. So things will only get better from here - I promise. And with thousands of listeners in my first four editions you’ve blown my socks off so please reach out with your stories to tell - young and experienced retirees are both welcome!

Until next week - make it epic! And keep scrolling there’s heaps more!

Bec Wilson Xx

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This article featured in both print and digital editions of The Age, The Sydney Morning Herald and The Brisbane Times Money sections on Sunday 9th July. You can read it here.

Retiring soon? It’s time to start thinking about these six things

The retirement clock is ticking in 2023 for an awful lot of Aussies. If you’re among the 500,000 Australians thinking of retiring in the next five years, it’s time to seize control of these six things that will help you make the most of it.

1. Understand your pension eligibility: Age pension thresholds shifted quite significantly on 1 July 2023, giving those eligible for the pension a bit of a pay rise and making more Australians eligible, with the pension qualification age moving from 66.5 to 67.

   Sixty-two per cent of Australians aged over 67 get some form of pension right now, so it’s nothing to be embarrassed about. And it’s not just the pension payment you want to explore, the Pension Concession Card (PCC) offered to people who qualify for even just $1 of pension income a fortnight can be incredibly helpful in keeping your cost of living down.

   If you aren’t eligible for the PCC, take the time to understand the Commonwealth Seniors Health Card, which is only subject to the income test at much higher thresholds than the pension.

(There’s plenty more to this article - read on here)

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July 26 is the retail release for How to Have an Epic Retirement

Take advantage of the 19% discount Booktopia is offering right now.

How to Have an Epic Retirement has arrived in the warehouse, and Booktopia are preparing to ship it straight to your hot little hands on the launch date. The 19% discount is only available for a week or so more. So, if you want to pre-order your copy, get that order in.

How to Have an Epic Retirement is filled with practical information, examples and questions covering the six key pillars of great modern retirement:

• Time

• Building your financial confidence

• Looking after your health

• Understanding how happiness is created and finding fulfilment

• Living out your travel dreams

• Your home and how your needs change in all the different phases of retirement

It’s the first book of its kind to explain in detail how the systems that support a new age and modern retirement in Australia work, making what can be a complex topic seem easy to navigate.

Secure your copy using the pre-order button below.

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Retirement Diaries: Ken Moffitt on the real experience of managing his own super in retirement and 5 years living in a caravan around Australia

In last Friday’s podcast, Ken Moffitt, an independent retiree, shares how his super has behaved in his 18 year retirement so far, the real cost of living in Darwin, and his five year trip caravanning Australia.

Listen to it here or on Spotify or Apply podcasts (or wherever you get your podcasts).

Or watch it on Youtube below.

(And thanks for all your feedback and support. It’s not perfect - yet! Aidan our new audio producer starts next week on the team to improve my sound quality - I promise!)