A new report reveals that baby boomers are better prepared financially as they approach retirement than many people believe, with high average wealth, historically high levels of home ownership and with their debt largely under control.

The 16th AMP.NATSEM Income and Wealth Report, Baby boomers – doing it for themselves  , released by the National Centre for Social and Economic Modelling (NATSEM) and AMP , also reveals big increases in labour force participation rates by older baby boomers to help them fund their forthcoming retirements.

Baby boomers – people aged between about 45-64 years, who make up around one-quarter of Australia’s population – hold one-half of the nation’s total household wealth, much of it in the value of their homes. While around one in three 45-64 year olds are still managing their mortgages, only one-tenth of the group aged 60-64 years are still paying off their home, and one-fifth of this older group still have children at home. 

AMP Financial Services Managing Director Craig Dunn says the baby boomers have more flexibility and choices when it comes to preparing for their retirements than many people think.

“Boomers have options and it is never too late to take advantage of them. These include choosing to work longer, saving more for retirement and earning more on their savings by taking more – but acceptable – investment risk.

"They can also take advantage of Government concessions and structure their financial affairs to pay less tax, as well as downsize their family homes to re-balance their savings to more liquid financial assets. Or they can combine any or all of these options to generally improve their financial situation.”

 “The baby boomers will be the first to benefit from the Simpler Super reforms announced in the 2006 Federal Budget, with one of the main features being the ability for Australians aged 60 or more to draw tax-free income from their superannuation from 1 July 2007,” Mr Dunn says.

NATSEM Director, and co-author of the report, Professor Ann Harding, said five years of strong economic growth and extensive publicity about the need to ‘work longer, save harder’ have resulted in more baby boomers finding and keeping jobs.

“The report shows some significant increases in workforce participation rates over the past 10 years, particularly among older Australians aged 60-64."

" Boomer women generally have shown their willingness to go back to work, with large increases in participation rates across the whole age group. For instance, the proportion of unmarried women aged 60-64 who were seeking employment increased by more than 20 percentage points between 1996 and 2006." Professor Harding said.

Baby boomers – doing it for themselves  is the 16th edition of the AMP.NATSEM Income and Wealth Report.

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