There seems to be something afoot regarding the "retirement age" in Australia at the moment. On the news there was mention of a "push" towards increasing the retirement age, and in today's Sydney Morning Herald there was an article by Ross Gittins espousing the virtues of gradually increasing the age at which the aged pension becomes available from 65 to 67 (or 68). There is some validity to the argument that since people are living considerably longer than when the "normal" retirement age was set at 65, it could be increased somewhat. It's also true the people are generally healthier in their elder years - if 40 is the new 30, then 70 must be the new 60. And increasing the retirement age will certainly help reduce the impact of the aging population on overall workforce numbers and the ratio of tax payers to state funded retirees.
The question of equity doesn't seem to have received much attention - those who are in a position to become "self-funded" retirees would still be able to retire at 65, while those relying entirely on the aged pension will be unable to retire until they reach the official retirement age. However, I don't think this is a huge issue - while equity of opportunity is an important principle, this is often confused with equity of outcome. If person A saves diligently for their retirement while person B doesn't save, there's no reason person A shouldn't benefit from this "deferred gratification" when they get to 65. Anyhow, this issue already exists to some extent with the aged pension cutting in at 65 - affluent workers are often in a position to take "early retirement" before they reach that age. Then again, even those on modest wage will have accumulated a reasonable superannuation balance by the time they reach preservation age (currently 55 for those born before 1 July 1960, and increasing with DOB until it hits 60). This means that many workers of relatively modest means will be able to retire at age 60, and consume their superannuation savings by the time they reach 67 or 68 and can move onto the aged pension.
Copyright Enough Wealth 2007