YOU'VE pencilled in 2011 for retirement - but you're still going to work. Why?.    

This is the year the first of the 5.3 million Australians in the baby-boomer generation turn 65.

But many are not retiring. They still get up and go to work.

The average retirement age increased by almost 12 months to 64.4 years in the first half of last year, according to AMP, which holds superannuation accounts for 328,000 working Australians.

There was a 25 per cent jump in the number of people over 65 still in the workforce in just six months, reported the bi-annual AMP Retirement Adequacy Index.

Deloitte Access Economics director Chris Richardson says the increase in the average retirement age is a predictable response to the financial crisis of 2008-09.  

"Reduced superannuation account balances may have induced those nearing retirement to delay it until financial markets and account balances recovered," he says.


Superannuation research firm Chant West's senior investment analyst Mano Mohankumar says the median growth-oriented superannuation fund still needs to gain another 5 per cent to get back to pre-GFC levels.

Costs up and incomes down

"RETIRED people face rising costs and lower incomes," says Mt Waverley self-funded retiree Ian Gresswell.  

"Concession caps for bills like gas, council rates and electricity are not keeping up with rising prices.

"People who are not working and making super contributions are facing diminishing incomes from their investments."

Robert and Vera Brown, of Frankston, have seen their income slashed by the rising Australian dollar.

Like thousands of other retired Australians, they each receive a monthly part- pension from another country - in the Browns' case from the UK.

Last year Robert was getting about $250 a month and Vera about $160.

That has dropped to $160 for Robert and $98 for Vera.

"We have a small allocated pension as well," Mr Brown says.

"But the balance in that just keeps going down. Our super investment balances are still well down on what they were before the GFC."

Approaching retirement

RISING living costs also are worrying employed people nearing retirement.  

Big super fund First State Super reported last month that 70 per cent of its members approaching retirement are concerned about their future.

Perhaps because average superannuation payouts on retirement are woefully inadequate -- $63,000 for women and $136,000 for men.

Millions of Australians have hardly any superannuation at all.    

The National Centre for Social and Economic Modelling says half of all women between 45 and 59 have less than $8000.  

Many super funds and financial advisers say $750,000 to $1 million is required to fund a modest or comfortable lifestyle in retirement.

The latest Westpac ASFA Retirement Standard Index says a couple looking for a comfortable retirement need $53,729 a year, while those seeking a modest lifestyle need $30,557 a year.

Financial counsellors have quick rules of thumb to work out what a retiree needs -- multiply the annual income you want in retirement by 17 if retiring about age 55, multiply by 15 for a retirement age of 60, and by 13 if you are going to work until 65.

Many people approaching retirement are not making the extra contributions they need to ensure a healthy super balance.  

Salary sacrifice is at its lowest levels since the AMP index began.

AMP Financial Services managing director Craig Meller said many people were more cautious about contributing to super since the GFC yet it "remains the most effective long-term savings vehicle".

Falling voluntary contributions to super worry Association of Superannuation Funds chief executive Pauline Vamos.

"With an ageing population and the need to have more people self-funding their retirement, we need to get serious about this," she said.

Ms Vamos wants the Federal Government to legislate a 3 per cent increase in the super guarantee contributions to 12 per cent, higher contribution caps for over-50s and a rebate for low-income earners.  

Staying at work

WORKING longer seems to be the major strategy of people nearing retirement, and the Government is providing support for older Australians to stay in the workforce.

Workers over 55 can claim the Mature Age Worker Tax Offset, which can save you up to $500 from your tax bill.

Financial advisers can help employed people over 55 with a transition-to-retirement strategy that can deliver tax benefits for making extra contributions to their super fund.

People over 60 who are still working can make extra contributions to super while drawing down a small pension to top up their income.

Centrelink's Work Bonus Scheme allows age pensioners to exclude up to $250 of fortnightly employment income from the pension income test.

WORK FOR THE PENSION?

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and your alternative is what???

why do you keep posting on employment issues when you have no experience of actually WORKING for a living?