Mid-life career change could double super savings

A new report from Colonial First State (CFS) has confirmed more than one-third of Australians aged 45 to 65 are considering a career switch which could help pre-retirees save almost double in superannuation.

The research, Unleash Your Second Half: How Australians are Reimagining Retirement, found 58 per cent of people considering a change would work longer in a different career than their current one, with 46 per cent willing to work 10 years longer and 11 per cent willing to work more than 10 years longer.

This comes as the nation experiences a widespread workforce shortage, with the Australian Bureau of Statistics’ February figures showing there are 423,500 job vacancies nationally.

The report found the main reasons for career changes were to fulfil their passions (36 per cent), improve their work-life balance (31 per cent) and earn more money (31 per cent).

Kelly Power, Chief Executive Officer of Colonial First State Superannuation, said middle-aged Australians have taken the opportunity to “reimagine the second half of their lives”, pursue their passions as careers and have a better work-life balance.

“Our research shows that people don’t see retirement as an end goal, but instead want to continue to learn, grow and explore – and that includes through changing careers and remaining in the workforce for longer,” she said.

“Working longer has traditionally had negative connotations, but pursuing a career you are truly passionate about, or achieving better work-life balance, helps people stay socially and mentally active and, importantly, maintain a sense of purpose.”

CFS’ research showed that individuals who re-entered the workforce in a full-time or part-time capacity and retired at age 75 would have between $400,000 and $550,000 in savings, while a ‘traditional retiree’ who left the workforce at 65 years would deplete their savings to around $250,000.

“Research amongst our nearly one million members shows that people reach a crunch point as they approach the second half of their life where stresses about family, employment and financial security converge with negative feelings towards the traditional concept of retirement,” Power said.

“It is at this point where we have the greatest opportunity to help Australians achieve financial freedom so they can pursue the lifestyle they want and live a life full of purpose in their later year.”