With many Australians seeing age as nothing more than a number, fitter and more adventurous older Aussies are redefining their retirement.

Older Australians are being encouraged to become downsizers, selling up their big houses and moving to smaller cheaper homes that then can help them build up their super and make their place available to younger Australians with kids. However, many of these Aussies are preferring to become ‘down-agers’ instead!

Writing in The Daily Telegraph, Cameron Micallef gave us a thumbnail sketch of these older Aussies saying that they are “redefining their retirement, becoming fitter and more adventurous in their post-work lives”.

And they’re even retiring before age 60 or 65, when they can easily access their super. While doing this might be a great idea now, if they live too long, they could end up with a super problem!

Micallef points out that the Australian Bureau of Statistics has found that the average retirement age is now 57.3 years, with retirees having more than 25 years post work.

What it’s great to see many Aussies are living to an average age of around 83 years, if they retire early and live their lives adventurously, what economic implications are there?

Helping many early retirees is the fact that many are finishing their working lives with bigger super balances, allowing them more flexibility in retirement.

Ross Ackland, AustralianSuper’s head of guidance and advice, told The Telegraph that the way

Aussies were leaving the workforce was constantly evolving. “We see a group of retirees that are turning the traditional ideas of retirement on its head …. seeing age as nothing more than a number,” he said.

“The longer life expectancy and those much higher balances results in lifestyles people seek to live in retirement evolve as well.”

Over the next decade, over 2.5 million Aussies will be heading into retirement. According to the government-funded Household, Income and Labour Dynamics in Australia (HILDA) survey of over 55 Australians, two-thirds (67%) of respondents strongly preferred to stay in their current neighbourhood. And only 6% showed a moderate or strong desire to leave. Ageing in place, as they call it, is then the natural choice of a vast majority of older Australians.

However, if retirement is becoming a younger trend, it might mean many Australians will run out of super. This will mean a bigger dependence of the pension system and a big reason for many retirees to sell their homes or downsize.

I’m surprised how many of my financial planning clients haven’t heard if they’re over 55 years of age and have owned their principal property for 10 years, they can sell and say a couple could each put $300,000 into super. Over time, early retirees will learn about this and will bump up their super by downsizing.

Because we’re living a longer time and average super balances for those between 60 and 65 year olds range from $300,000 to $430,000, a big super problem lies ahead for not only some early retirees but even those late to give up work.

Apart from downsizing their properties to keep enjoying their more adventurous lives, I bet reverse mortgages or equity release products are bound to become increasingly popular.

Below is the latest on reverse mortgages:

1. Reverse mortgages have seen a significant rise in Australia, particularly since 2019.
2. The government-funded Home Equity Access Scheme (HEAS) had over 12,000 participants at the start of 2024, up from approximately 9,700 in 2023.
3. Commercial lenders have also reported increased demand, with some institutions like Gateway Bank experiencing an 81% growth in their reverse mortgage business year-over-year in 2024.
4. There has been a 300% increase in inquiries about reverse mortgages from Australians over the age of 60 in the past two years, indicating a growing awareness and interest in these financial products.

All this says to me that many older Australians are set to star in a hip pocket inspired real life story entitled: “Honey, we shrunk the kids’ inheritance!”