Forcing Australians to work into their 60s could be detrimental to their sense of autonomy, health and wellbeing, a study has found.
Taking away people’s autonomy over when they retire and forcing them to work until age 67 to qualify for a government pension could harm their health and well-being.
As debate rages over who should pay the burden of aged care in Australia, a study has found that people who are more likely to experience the full benefits of retirement may be more likely to make the decision to stop working.
But only 30 per cent of Australians can afford to retire before they become eligible for a pension, according to Dr Rong Zhu, senior lecturer in economics at Flinders University College of Business, Government and Law.
Forcing Australians to work into their 60s could be damaging to their sense of autonomy, health and wellbeing, a study has found
“We need to consider the unintended consequences of delayed retirement on health and well-being via a reduced sense of internal control,” he told AAP.
“If workers continue to work past retirement age, they are less likely to consider life outcomes resulting from their own choices and actions.”
This can impact any benefits that employees might otherwise look forward to at that stage of their lives.
“Our paper shows that retirement significantly improves the physical and mental health of older people, as well as their subjective well-being, as measured by life satisfaction,” said Dr. Zhu.
‘A third of the positive impact of retirement on health and a fifth on well-being can be explained by the increase in internal locus of control caused by retirement.
Only 30 percent of Australians can afford to retire before they become eligible for a pension, according to Dr Rong Zhu, senior lecturer in economics at Flinders University.
‘Faced with a higher age of eligibility age pension, the health and wellbeing benefits that come with retirement also come at a later date, if an older person delays retirement.’
Raising the retirement age to 67 for men and women could be difficult, even though they may have been enjoying the benefits of their pension much earlier, he added.
Australia’s retirement rate is the second highest of all OECD countries, with about 70 percent of retirees receiving partial or full benefits.
But a recent study into the aged care system shows that within the next forty years the proportion of people with access to a pension will decline by around 15 per cent, with the total wealth of older Australians rising thanks to increased pensions and assets.
The government-appointed Aged Care Task Force has recommended that wealthier baby boomers contribute more to elder care to ease pressure on the federal budget and allow more support for people with limited resources to access residential and home care.
The government finances approximately 75 percent of residential elderly care and 95 percent of home care costs
The government finances approximately 75 percent of residential elderly care and 95 percent of home care costs.
Reforms are needed to make the system more sustainable, according to task force member and former NSW Premier Mike Baird.
“There are limitations and requirements in all parts of the budget,” he said.
“Asking those who have the resources to contribute more is a logical step and having a safety net for those who don’t have the resources also provides some protection, so it’s a good balance.”