Financial planners should encourage clients to hold off on their retirement in order to save more superannuation, the Financial Service Council (FSC) said following its research into discrimination against older workers.
“Planners [should be] encouraging their clients to continue to work until a later age, whether it’s full time or part time, to help them build their superannuation,” FSC chief executive officer John Brogden told InvestorDaily.
“The reality is, the more super you retire on, the better your retirement will be, and your quality of life.
“The federal government has announced now that you will be able to continue to work to accumulate super into older age. Originally there was an age limit [which] has been demolished. So there are many remaining tax incentives to working. People are living longer so the more they save for their retirement, the better their retirement will be.”
New research by Westfield Wright for the FSC highlighted a key concern among older workers that they would not be able to save a suitable amount of superannuation before they reached retirement.
Around half of people over 50 said they were dissatisfied with the savings they had put aside for retirement.
The research showed 28 per cent of older workers had experienced discrimination, most commonly by being made redundant before others. Other examples included lack of training and development, verbal abuse and inflexibility towards health and physical needs.
Discrimination was most acute among mid-managers earning the average Australian wage of $70,000 per year, the report found.
Cost cutting and workplace culture were the most common reasons cited for the decision to recruit younger staff.
Older workers were concerned that they would not save a suitable amount of superannuation before reaching retirement.
“At current trends, by 2050 there will only be 2.7 working Australians for every citizen over 65. Without action, this will have serious implications for the quality of life of every Australian,” Brogden said.
“We need to end the concept of full-time work followed by full-time retirement. Australians remaining in the workforce for longer periods will stretch retirement incomes by supplementing superannuation through part-time work as well as reduce our nation’s skills shortage.
“However the solution is not a new raft of anti-discrimination laws. Instead, the focus should be on more flexible work practices and finding other paths of employment such as consulting or mentoring to encourage further workforce participation by older workers.”
The study found those companies that did make the effort to engage and retain older workers were able to ease their skills shortages and found older employees to be ‘easier to manage’ and a ‘safe pair of hands’, he said.
“Older workers also need to be flexible and recognise they cannot have it all – the flexible work hours and slower paced job on the same salary as they earned before is unrealistic,” Brogden added.
