As the great bulge of babies born after World War II has moved through their life course, the world has changed to suit them and their needs.

But just as the latest generations of Zoomers and Millennials have begun to outnumber the Baby Boomers, and are taking over as the politically dominant age group, the Boomers have caused one last change: retirement has become more a matter of personal preference, with many choosing to keep working.

In the years before the first of the Boomers began reaching normal retirement age in the early 2010s, the big trend was to early retirement. Many people fancied the idea of stopping work just as soon as it was financially feasible.

Men wouldn’t become eligible for the age pension until they turned 65, but maybe they had enough superannuation or other savings to live on until then. Or perhaps they could downsize, selling the family home and moving to something smaller and cheaper up the coast, leaving them with money to invest and live on the interest.

Employers were often keen to get rid of older workers, giving them redundancy payouts sufficient to let them retire before reaching age-pension age. Early retirement was great if you could wangle it somehow.

This was when worthies started worrying about “population ageing”. The average age of the population was rising because couples were having fewer children, but oldies were living longer.

Early retirement was adding to the problem, reducing the proportion of people still in the workforce, thus worsening the ratio of people needing to be supported relative to workers doing the supporting.

This was the motivation for the Howard Government’s introduction of a five-yearly “ intergenerational report” in 2002. Treasury’s job was to assess what population ageing was likely to do to the federal budget over the coming 40 years, assuming policies remained unchanged.

The idea was to produce a report every five years that said: “Oh, no. The budget deficit’s just going to get bigger and bigger because we’ve got an ever-growing army of oldies to support with health and aged care, but an ever-smaller proportion of the population working. Something must be done.”

Well, something has been done, partly by the Boomers and partly by the authorities. In five-yearly report after report, Treasury assumed that, with the Boomers retiring — and many retiring early — the proportion of the population that was participating in the workforce would just keep falling.

Wrong. Badly wrong. With about 67% of the working-age population either in paid work or seeking it, our rate of participation is near record levels.

And the reason? Too many of the people who could have retired — and, in earlier times, would have — haven’t. They’ve just kept steaming on. (And I don’t just mean yours truly.)

According to research by economist Terry Rawnsley of chartered accountants KPMG, the share of 70-year-old men still in paid employment has increased from one in 10 in 2004 to one in four today. And about 10% of men in their late 70s are still working.

Note that anyone still working in their 70s is doing so of their own volition. It’s possible they’re still working because they can’t make ends meet on the age pension, but more likely they’re working just because they want to.

There is no official age at which people must retire. What many of us take to be the retirement age is the age at which people become eligible for the age pension. And it’s true that governments have been encouraging later retirement by increasing the age for eligibility.

For decades, the pension age for men was 65, while for women it was 60. But between 1995 and 2004 the age for women was raised to 65. Then, between 2017 and July 2023, the pension age was raised for both sexes from 65 to 67.

So, for women between 60 and 67, and men between 65 and 67, their decisions about when to retire may have been influenced by government policy. According to figures from the Melbourne Institute’s HILDA survey published this week, the proportion of women aged 60 to 64 who were completely retired fell from 69% to 41% over the 20 years to 2023. That may be mainly the government’s doing.

Similarly, the later pension age may explain most of the fall of 20 percentage points in the proportion of women aged 65 to 69 who were completely retired over the 20 years. And the 12 percentage point fall for men.

But if you look at people aged 55 to 59, who were always too young for the age pension, you see the proportion of those completely retired fell over the 20 years by 25 percentage points for women and 11 percentage points for men.

That tells you early retirement has gone out of fashion without any help from changing government policy.

So what other factors could be encouraging us to work longer? Well, Australians have long been near the top when it comes to longevity. And advances in medical science have allowed us to live longer, active lives.

Jobs have become less physically demanding. Ill-health is the main reason people choose to retire early.

Population ageing means we’re likely to encounter shortages of labour, which may explain why bosses have become much less keen to show older workers the door. It’s become more common for oldies to go part-time rather than stop working completely.

Another factor is the introduction of compulsory super in 1992, which is making it easier for workers to make decisions about when to retire independent of what’s happening to the pension. You can get your hands on your super once you’re 60, provided you’ve permanently ceased work. And once you’re 65 you can get your super and keep working.

I think that, if we’re living longer, healthier lives doing work that’s less physically demanding, it makes sense to spend that extra time working rather than cooling your heels in retirement. I doubt it will be long before the age pension age is phased up to 70.

Republished from The Sydney Morning Herald, 24 September 2025

The views expressed in this article may or may not reflect those of Pearls and Irritations.