by Ben Power
This article was originally published on smh.com.au.
When Chris Longhurst received a generous redundancy from his position in pharma sales in Canberra at 55, he didn’t take it as an opportunity to retire.
Instead, he crafted a part-time gig as a civil celebrant to supplement his retirement income as well as find meaning, connection and another way to keep contributing to society.
While many Australians have traditionally viewed retirement as perhaps spending pleasant days at the local bowls club, the golf course or the beach, a new generation of pre-retirees and retirees are staying on to work part-time.
"Retirement has given me a wonderful opportunity to find my passion," Longhurst says. Today, his motto is "re-fire, not retire".
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In 2011, the first of 5.6 million Australian baby boomers hit retirement age. Every day another 800 of the cohort retires, with many looking for continued income and another way to use their talents.
For Longhurst, after leaving his sales job, he started working in the funeral industry, and figured his skills could be put to use as a funeral celebrant. He has since moved into weddings and says as a self-funded retiree the job is a great supplement to his retirement income from super.
Retirees entering the gig economy
Another path into continued, scaled down employment, is entering the gig economy through tech disruptors like Uber, Airtasker, Airbnb and Freelancer.com.
These companies are helping retirees find convenient ways to get paid for tasks like nannying, handyman services, food delivery, transport and care as well as earning extra rental income.
Like Longhurst, former school teacher Jill Healy-Quintard is another who eschews traditional retirement. She runs Body and Balance, a fitness business, while tapping into Airbnb with her husband to generate an extra income stream.
The couple started by turning the lower level of their home into a self-contained apartment to rent on Airbnb. They now also rent out the main house upstairs and move between the two accommodations according to demand.
Financial rules of the game
Keiran McIlwain, head of advice and professionalism at MLC, says gig work can help preserve retirement savings by supplementing cash flow. However, participants need to be aware of the financial rules affecting superannuation and pension payments.
Because gig economy work is a contract arrangement, employers are not required to make compulsory super contributions.
Those aged 67 to 74 who want to contribute to super themselves need to satisfy the "work test". They need to have physically worked 40 hours within a 30-day period during the financial year, though there are some exemptions.1
"Some gig work could help you meet this requirement, although passive income such as rental income from Airbnb wouldn't qualify," McIlwain says.
Income and contributions
Retirees who receive any government pension or benefit also need to disclose any changes in financial position – including gig income – to Centrelink and the Department of Veterans' Affairs.
"Depending on your overall financial position, working in the gig economy could reduce any social security entitlements you’re eligible to receive," McIlwain says.
But there are provisions for those on the full age pension to earn $300 a fortnight, before their pension starts to be tapered down.
Again, to qualify for this benefit, the retiree needs to be engaged in "gainful work" that involves physical exertion, excluding passive investment income such as that from Airbnb.
A healthy option
Jonathan Steffanoni, a superannuation expert at QMV Legal, says the gig economy provides retirees with autonomy and flexibility.
The social aspect of meaningful work also helps people stay mentally healthy into retirement. “Combined with the additional income, that makes working in retirement an attractive option,” he says.
Steffanoni also warns to be prepared for the lifestyle impact of engaging in the gig economy in retirement: "People do look forward to taking time off and relaxing. It might not feel like retirement."
Retirees also face the usual risks of subcontractors including unpredictable work volume and the possible need for liability insurance.
For next-generation retirees like Chris Longhurst, however, the benefits far outweigh other concerns. When he first noticed civil celebrants in the funeral trade, he says: "There were very good ones and not so good ones. I thought 'I could do this'."
Today, he finds meaning as one of the "good ones". And as a bonus he is not putting a drain on his super.
1 An exemption from the work test is available to eligible retirees which may allow you to make voluntary contributions to your super without the need to satisfy the work test. This is available to individuals aged 67 - 74, who had a total super balance less than $300,000 (at the prior 30 June), and met the ordinary work test for the previous financial year. Also, this can only be applied once in your lifetime.
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