The dark side of raising the retirement age
EXCLUSIVE:: Increasing the official retirement age in Australia could be bad for people's health.
New research by Deakin University in collaboration with French economists has found upping the age Aussies are able to get the pension from 65 and six months to 67 by July 2023, as planned, will have negative health consequences for many.
Deakin Business School behavioural economist Dr Cahit Guven said contrary to what a lot of Australians believed, the positive health impacts of retirement were now clear and the Government needed to think twice before raising the pension eligibility age.
"Men especially are more likely to believe that their health will deteriorate once they retire, but our study shows retirement actually comes with unexpected improvements in general, physical, and mental health," he said. "We found that men and women are up to around 24 per cent less likely to experience unexpected bad health after retirement. Conversely, men and women are up to around 14 per cent more likely to experience good health unexpectedly after retirement, compared to beforehand."
The study drew on data from the Household, Income and Labour Dynamics in Australia survey 2001 to 2014, covering 51,000 observations and more than 1600 transitions to retirement.
Recent changes to pension eligibility had spurred protest movements and arrests in the UK, Belgium and Russia, Dr Guven said.
"Our paper implies that even if such reforms seem necessary, they may postpone the beneficial effects that retirement has on people's health. Policymakers should take this factor into account when deciding whether or not there should be compulsory or voluntary retirement and whether or not we should increase the official retirement age," he said.
"By making people work even longer into their old age, you could be increasing their likelihood of poor health, and denying them the health benefits and higher level of life satisfaction that retirement brings."
Under an Abbott-era policy, the pension age was set to rise even further, to 70, but that plan was wound back to 67 by Prime Minister Scott Morrison.
National Secretary of the Australian Manufacturing Workers Union Paul Bastian said the bad backs, shoulder injuries and joint and ligament damage which often accompanied hard physical or repetitive work became more common as workers aged.
"Many of those injuries become debilitating as you get past 60," he said.
"It's really easy for a bunch of politicians and bean counters to sit behind a desk and tell people that they can work until they're 67 … It should be compulsory for any politician advocating for an increase in the retirement age to spend a week of 12 hour shifts on the factory floor at a manufacturing facility. I reckon they might have different perspective after that."
But chief executive of the nation's peak ageing body COTA Australia, Ian Yates, said there was also research showing people who wanted to work in their older age had "significantly good" health outcomes.
"I think the key is people being able to do what's appropriate for them," he said. "And while we talk about people in manual labour positions, we have been surprised recently by the number of people in those roles working well on into their 70s because they're working safely, they always have done, and they don't want to stop because they're enjoying it."