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Retirement age raise could hurt health, economists warn

While some might assume that their health will deteriorate after they retire, they might instead face unexpected improvements across the board.

And delaying retirement would mean postponing beneficial effects, researchers have warned.

Australian and French economists cautioned against postponing pension access on the back of their research, saying that the move to raise the eligibility age in Australia from 65 to 67 years by 2023 could leave workers more vulnerable to unexpected health shocks with negative consequences.

Dr Cahit Guven, a behavioural economist at Deakin University, said the team found that both men and women were 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,” Guven.

The research team used extensive data from the Household, Income and Labour Dynamics in Australia survey 2001 to 2014, covering more than 1600 transitions to retirement.

Guven said the results showed representatives should think twice before raising the retirement age.

“Many developed countries have recently increased pension eligibility age, leading to massive protests,” he 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.”

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2 comments

  1. I am a 57 year old Male and still work full time, All though I am looking forward to retirement, at the same time I wonder how I will go financially. I am on a very modest income and have been paying into super since 1988.

    What gets under my skin is the negative attitude and misinformation about the elderly and how they are a burden on our society financially. This is so wrong. I work in aged care and I see clearly how the money goes around. The elderly, even poor ones contribute to our society in every way. They provide immeasurable jobs. Take aged care for example. Look who is employed in the aged care sector, Nurses – Care staff – Doctors – cleaners – kitchen staff – Manufacturing ( to build facilities to house them) manages – physio therapists, the list goes on. All these people pay taxes and this money goes into the big pot.

    So to say they are a burden is not correct. Please will someone stand up and tell it like it really is.

    • Jennifer Driscoll

      Well said. I have just retired from a full time Nursing position at 63 but I intend to contribute to my community for many years yet. I will be self funded until my super savings are depleted. I was so pleased to read an article pointing out the health benefits of retirement.