Have we hit peak retirement age?

Australian workers are continuing to retire at their oldest age since the early 1970s, with expected retirement age for both men and women remaining unchanged over the last two years suggesting a fundamental shift in labour market dynamics post-COVID-19. 

In both 2022 and 2023: 

• The expected retirement age for men was 66.2 years, the highest since 1972.
• The expected retirement age for women was 64.8 years, the highest since 1971.

Despite this, the retirement age over the last two decades has been steadily increasing from 63.3 to 66.2 years for men and from 61.6 to 64.8 years for women. This has been driven largely by improved job flexibility in ‘knowledge intensive’ roles and tighter labour market conditions meaning highly educated Australians are staying in the workforce longer. 

“The adoption of working from home has made many older Australians in professional jobs realise that they could ‘semi-retire’ and continue to dabble in the workforce from home or even from a coastal location,” says KPMG Urban Economist, Terry Rawnsley. 

Older workers remaining in the labour force during COVID-19 have increased the expected age of retirement, thereby filling vital gaps in the Australian labour market. Between 2019 and 2021, the Australian labour force grew by 185,000 people, with those aged 55 and over representing almost 70 percent (127,000) of that increase. With the return of international migration and the growth in the under-55 labour force, the share of over-55s fell to 21.3 percent in 2023. 

“Even in a tight labour market, we may have reached a plateau in the expected age of retirement, suggesting we cannot expect older workers to continue working longer. This is because we simply can't find enough older workers to sustain the growth that occurred during the COVID-19 era.” explains KPMG Urban Economist, Terry Rawnsley.  

Since the onset of the pandemic, women have been increasingly drawn into full-time employment, with the expected age of retirement from full-time work increasing by more than a year. Meanwhile, the increased expected retirement age for men during the same period was driven by increases in part-time employment. 

Among the major capital cities, Greater Perth has the highest expected retirement age for women and the second highest for men, inversely Greater Melbourne has the highest age for men and the second highest for women. The higher retirement ages reflect the tight labour markets in both those cities. 

Greater Sydney and Greater Brisbane have lower expected age of retirements which may be linked to people shifting out of the city into nearby coastal areas (e.g. Central Coast, Sunshine Coast, Gold Coast,) when they leave the labour force.  

Hayden Jewell
Corporate Communications 
+61 423 868 454
hjewell@kpmg.com.au