Research from Equip Super found just 26% of Australian workers believe they will be able to retire at 65.

The average expected delay was six extra years, meaning retiring aged 71.

Paul Stocker, Head of Advice at Equip, said the survey results suggest inflation is forcing many Aussies to deprioritise retirement savings.

"About 40% [of respondents] said they now intend to delay their retirement due to the cost of living," he told the Savings Tip Jar podcast.

"With all of the financial constraints that people are facing in their day to day life, it's obviously flowing through in terms of planning for retirement as well."

The elevated cost of living also means retirees need to have more wealth than ever to pay the bills after stopping work - the latest retirement report from the Association of Superannuation Funds of Australia (ASFA) found a retired couple now needs to spend more than $72,000 per year to live comfortably.

The maximum annual aged pension for couples is currently $39,296.40.

Over the past 18 years, the average retirement age grew 9.4%, from 52 in 2004/05 to 56.9 by 2022/23, per the ABS.

Time to head back to work?

Alex Jamieson, founder of AJ Financial Planning, says he is being approached by lots of older Australians who have already retired, but feel they need to go back to work.

"Sadly, if your retirement plan hasn't been created taking into account inflationary pressures like the type we are experiencing today, you don't have a lot of options," Mr Jamieson said.

"You can try to cut back costs and live with it, or you can look to get back into the workforce to start bridging the financial gap."

Pensioners facing a return to the labour force can now earn more than ever without seeing a reduction to their benefits, after increases to the work income bonus balance were made permanent at the start of this year.

The age pension is means tested - when you earn above a certain amount, your pension payments are reduced.

However, the work bonus balance offsets any supplemental income not from pension payments, meaning additional income up to whatever the balance is is not counted in the means test.

If you have a balance of $10,000, you can earn up to $10,000 in supplementary income that will not be counted as part of the means test.

As of 1 January, the maximum balance is $11,800, while every pensioner will receive an upfront credit of $4,000 to their balance.

The first $300 earned over a fortnight is also not included in the means test.

"The general rule of thumb is you can typically work around two days per week on a minimum casual basis before your Centrelink income test will be impacted by the extra income," Mr Jamieson explained.

Advocates such as National Seniors Australia have pushed to increase working limits, or make the age pension universal to remove administration burden, as is the case in New Zealand. 

How to retire on schedule

For some people, there are non financial reasons to keep working for longer- you might actually enjoy your job for example, or like the structure and routine of a full time job.

However, if you're looking to retire as soon as you can, Mr Stocker suggests taking action now, regardless of how far off 65 you are.

"What tends to happen with some people...[they] forget about [retirement] until it's too late," he told the podcast.

"For the younger age group...have a think about what your discretionary spending could actually be, and it least make some contribution into...superannuation."

"Things like salary sacrifice and if you're going to get a pay rise, why would you not try and live on your current income if your expenses are the same and maybe put that extra little bit into super?

"The longer you put in and you contribute, the more you'll have at the end."

If you're fast approaching retirement age and panicking about your super balance, Mr Stocker said there could still be ways that you can take action.

"If you're going to sell a house, there's opportunities to make lump sum contributions into super in a tax effective way," he explained.

"Knowing the right investment option is a good thing as well, to consider whether you're getting the right growth compared to the risk you're taking, plus making additional contributions."

See Also: Downsizing Your Home as a Pensioner or Retiree

Picture by James Hose Jr on Unsplash