As has been widely reported, the Budget proposes that the age of eligibility for the age pension increase to 70 from 2035.

Yet even without such planned Budget measures, our greater longevity and the widespread inadequacy of retirement savings means that more and more people would have been likely to decide to extend their working lives.

Governments and individuals throughout the world are dealing with what The Economist magazine among others has tagged the "silver tsunami" - the rapid ageing of the population.

It is perhaps timely for individuals to question what working until an older age than initially expected may mean for their personal lives and for their retirement savings.

Issues to discuss with your financial planner, for instance, in regard to a longer working life might include:

• The state of your retirement savings and whether you should be increasing your super contributions over your remaining time in the workforce.
• Whether to progressively reduce your working hours if you are working until an older age. This may involve, for instance, taking a transition-to-retirement (TTR) pension from your super fund to supplement your perhaps lower employment income. (Earnings on assets backing a superannuation pension are not subject to tax. Fund members aged 55 or over are eligible for a TTR pension.)
• Whether to recontribute any of your TTR pension back into super if in excess of your immediate needs. As your financial planner will explain, this may have estate-planning benefits.
• Whether your portfolio's asset allocation is still appropriate given that you may be working longer. It is a matter of getting the risk-return balance of your portfolio right for your circumstances.

No doubt, many people will regard a longer working life as an opportunity to boost their retirement savings and/or to keep existing savings intact for a longer period.

A longer time in the workforce means, of course, that your savings will finance or help finance a shorter retirement than otherwise. This may have benefits for your standard of living in retirement.

There's plenty to think about when it comes to working longer until retirement. No doubt, many people will devote more attention to getting their work-life balance just right.

Fortune Magazine in the US published an interesting interview a few years ago with a once-retired academic who returned to work to rebuild her savings in the wake of the GFC. And she actually ended up enjoying work more than retirement. In other words, a long working life is not solely a financial issue.

Whether or not individuals find work or retirement more appropriate or satisfying will much depends on personal circumstances include the nature of their jobs and the state of their health.

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
15th  May 2014