Female incomes up, but retirement still looks cloudy
The latest Income and Wealth Report on labour force statistics produced by AMP and the National Centre for Social and Economic Modelling (NATSEM) has shown that white-collar workers now dominate the domestic workforce and university graduates have the best employment opportunities as they currently fill 70 per cent of new jobs available.
The study also indicated women have been the real winners out of this trend with 43 per cent of all new jobs created since 1990 going to female graduates.
Women’s participation at the older end of the workforce has been significant as well with the proportion of 45 to 54-year-old working women increasing by over 50 per cent, the proportion of 55 to 59-year-old working women more than doubling, and the proportion of women aged between 60 and 64 in the workforce nearly tripling.
In comparison, the participation rates of men over the age of 50 has basically remained the same.
However, the report also revealed premature retirement for older workers remains a key issue, particularly in terms of accruing adequate retirement savings.
“Premature retirement, together with inadequate savings in earlier years, means many baby boomers won’t have the opportunity to accrue last minute superannuation nor will their golden years be as comfortable as they’d hoped,” AMP Financial Services managing director Craig Dunn said.
Statistics indicate the main financial source currently for three out of four retirees is a Government pension or allowance, emphasising the shortfall in retirement savings.
Dunn believes a combination of the compulsory level of savings, currently at 9 per cent, combined with a Government pension will not sustain most people in the lifestyle to which they are accustomed.
“People who earn the average wage, say $50,000 or $60,000 as the wage, their lifestyle expectations are going to fall well short because the Government pension as a proportion of their current wage is a lot lower than people on lower wages. So, basically what it shows is people who are on lower wages, their expectations are probably going to be met with 9 per cent, assuming they start work in their early 20s, but people on higher wages are going to face real challenges,” Dunn explained.
The workforce appears to be recognising the seriousness of the situation with a recent increase in the number of people aged 60 to 65 still working or willing to work.
Dunn feels this trend is set to continue, but thinks early savings is the key to addressing the problem.
“The fundamental message that we’ve got to get through as a community for people under 40 is that they need to start saving as young as they can. Then you’ve got the impact of compound interest, which is a wonderful thing, and that fundamentally looks after your future,” Dunn said.
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