And then there are the factors of greater longevity and improvements in health.
Based on its 2010-11 Multipurpose Household Survey, the ABS reports that
228,000 retirees over 45 fell into in this category at the time of the survey.
The big three reasons for coming out of retirement (or at least wanting to) are
financial need (41 per cent), "bored or needing something to do" (28
per cent), and an "interesting opportunity came up" (18 per cent).
Perhaps the most efficient way to stretch retirement savings is to return to
work (or to postpone retirement for a few years). It's obvious. By remaining at
work, you have an opportunity to save more for retirement and, significantly,
you do not have to draw down on your retirement savings at this point.
Further, more retirees are finding that a retirement lifestyle is not
necessarily meeting their expectations.
The authors of a special report on retirement published by The Economist
magazine a couple of years ago summed it up well with the words:
"Retirement has been overdone. The original idea [of retirement] was that
people should enjoy a bit of rest after a life at work..." But with
prevailing longevity rates, retirement could last quarter of a century or so,
the magazine emphasised.
As Smart Investing has discussed in the past, some retirees who were
forced to return to work because of the GFC's impact have found they actually
enjoy it - regardless of the financial benefits. The possibility of returning
to work - if a job is available - provides another avenue for healthy retirees
who are determined to preserve their retirement savings for as long as possible.
By Robin Bowerman
Principal & Head of Retail, Vanguard Investments Australia