Why We Should Plan to Retire at 80, Not 65

For decades, Australians have worked towards the goal of retiring at 65. But what if that goal is outdated? With longer life expectancies, rising costs of living, and changing work dynamics, is it time to rethink retirement and plan for 80 instead?

Matthew McCabe, a financial planner from Newcastle Advisors, has spent over 20 years helping Australians navigate their financial futures. He believes the key issue isn’t just financial—it’s psychological.

“As a financial planner, I find the concept of retiring at 80 instead of 65 fascinating,” McCabe says. “It goes against the mindset of many Australians we’ve advised over the years. However, the real question isn’t just about how long you work, but what you’re retiring to.”

The Reality of Retirement—Beyond the Finances

Many Australians plan for the financial aspects of retirement but overlook the psychological and emotional impact. McCabe recalls one client who had more than enough money to retire but kept delaying the decision.

“He was 72, had worked for the same employer for over 30 years, and his work was his identity,” McCabe explains. “He was constantly making excuses to stay, and we eventually realised it wasn’t about money—he had nothing to retire to. His career gave him purpose, structure, and social interaction. When he was made redundant unexpectedly, he walked out without a farewell. Within months, he was lost, isolated, and, tragically, attempted suicide.”

This experience profoundly shaped the way McCabe approaches retirement planning today. “We don’t just focus on superannuation and investments,” he says. “We focus on the whole person—financial longevity, purpose, routine, social connection, and overall well-being.”

Why Retiring at 80 Could Make Sense

For many Australians, the traditional idea of retirement is changing.

“With advances in healthcare, many people are living longer and staying healthier for longer,” McCabe says. “If you love what you do and still find fulfilment in work, why stop at 65? Instead of retirement being an endpoint, we should view it as a transition—reducing work gradually while maintaining purpose and structure.”

However, McCabe warns that working until 80 isn’t viable for everyone. “There’s a difference between your lifespan and your health span,” he explains. “For an average 65-year-old Australian male, life expectancy is 85. But health span—the years where you’re still physically capable and independent—may only extend to 75. If you’re planning to work until 80, you may find your health limiting your choices.”

Planning for the Whole Person

McCabe believes that whether someone retires at 50, 65, or 80, they need more than just financial security.

“We help clients set goals that extend beyond money,” he says. “Why are you getting up each day? What excites you? How will you stay connected socially? Are you contributing to something bigger than yourself? Are you taking care of your health?”

Physical well-being is another crucial factor. “A routine that includes exercise is essential for mental and physical health,” McCabe advises. “So is maintaining social connections—whether through work, volunteering, hobbies, or community involvement. The happiest retirees are the ones who have a strong sense of purpose and connection.”

The Future of Retirement in Australia

As retirement expectations shift, McCabe believes Australians need to rethink their approach. “The traditional idea of retiring at 65 worked when life expectancy was shorter,” he says. “But today, we need a flexible approach. Some people may want to retire at 55, others may work into their 80s. The key is to have a plan that supports both financial security and emotional well-being.”

For those considering an extended career, McCabe recommends building adaptability into their work life. “Industries change, and job demands evolve. Staying relevant through ongoing learning and networking is crucial. The best way to plan for retirement—whether it’s at 65 or 80—is to keep your options open and maintain a sense of purpose.”

Final Thoughts

“Retirement isn’t just about how much money you have,” McCabe concludes. “It’s about what you’ll do with your time and how you’ll continue to find meaning in life. If you’re thinking about working until 80, make sure it’s because you want to—not because you have to. And whether you retire early or late, don’t just plan financially. Plan for your whole self.”