The Baby Boomers Revisited

Population ageing is a major issue in Australia. The sharp fall in fertility allied with lengthening life spans will result in sharp increases in the number of older Australians in coming years. Population ageing is expected to have profound consequences for government, due to the higher health, aged care and pension costs and slower economic growth associated with an ageing population (Treasury, 2002; Productivity Commission, 2005). During the past few years the Federal Government has been encouraging the baby boomers to save harder and work longer, so that they can help finance a comfortable living standard in retirement. But have these messages been heeded?

In previous issues of the AMP.NATSEM Income and Wealth Report, we have looked at those approaching retirement — but changing labour force behaviour, changes to government benefits and dramatic changes to superannuation all make it timely to reconsider this pre- and early-retirement group. The release in 2006 of new ABS data on the circumstances, spending and savings behaviour of Australians also provides new insights into this crucial cohort (ABS, 2006a).