You’re not as old as you think claims new study
LOS ANGELES: A new study on ageing sets out to debunk existing precepts and replace them with key adjustments.
Changing expectations and opportunities mean Australians now aren’t entering adulthood until they’re 28, and they’re not becoming truly old until they hit 77, prompting savers to rethink their goals for their golden years, new research has found.
Lives in the 1950s could be cut into three distinct categories: child, adult and old, each life stage occurring from 0-12, 13-60 and 61-69 respectively, a report by demographer Bernard Salt says.
However, by 1990, that had grown to four stages – child (0-12), teen (13-19), adult, (20-64) and old (65-77), The Demographics Group report, commissioned by wealth manager AMP, found.
Today, however, the six life stages include childhood (0-12), adolescence, or training, which spans 13-28, before a shorter adulthood of 29-55, a lifestyle period from 56-64 in which semi-retired or early retired Australians pursue both work and leisure. Retirement extends from 65-76, and old age comes in at 77.
The adolescence stage has grown because of the expansion in knowledge-based jobs requiring a degree, in turn pushing back other traditional milestones such as marriage, Mr Salt said.
Health advances, coupled with the growing class of knowledge-based workers, also means Australians have longer working lives, and are considering new ways to fund their lifestyle goals, he said. This is forging an approach to wealth built around flexibility and time, rather than a traditional goal of home ownership, he added.
The research examined home ownership census data from 1911 to 2021, and found ownership rates had slid from 73 per cent in 1966 to 63 per cent. Mr Salt said it reflected a shared and continued focus on saving for retirement, but a growing tendency to consider other methods such as savings, equities and other managed investments.
“People still want [home ownership], but that 10 per cent gives people freedom to make other choices – to put money into superannuation, to build up a nest egg and to respond to unforeseen circumstances,” he said.
Participants cited contentment, good health, freedom, the absence of stress, time and a sense of success as features making up “wealth”, in addition to financial independence.
The introduction of a “retired” cohort also speaks to Australians’ growing focus on what life looks like after work, said Mr Salt.
“You could make the connection that maybe our [Baby Boomer] generation, and maybe one back, are the first generations to really have to deal with retirement. Our grandparents died at 61, 62 in the 1950s and 1960s,” he said.
“The whole idea of retirement planning was not an issue because you died before you actually qualified for the age pension at 65. So, we’re dealing with new concepts that are moving, there is no frame of reference going back 50 years.”
Because of this, the question of how societies and individuals prepare and fund extended retirements and those of others is a “relatively new” one. “So if policymakers are struggling to grapple with it, it may be because they haven’t appreciated the significance of it, but also because there’s no corporate memory.”
AMP CEO Alexis George said the report highlighted the need for personal advice, as the goalposts had shifted from home ownership to a financial ability to “pursue unique passions and goals”.