How depression and other mental health problems can affect future living standards of those out of the labour force

Objectives: To estimate the extent to which those who exit the workforce early due to mental health problems have less savings by the time they reach retirement age. Methods: Using HealthWealthMOD - a microsimulation model of Australians aged 45-64 years that predicts accumulated savings at age 65, regression models were used to analyse the differences between the projected savings and the retirement incomes of people at age 65 for those currently working with no chronic condition, and people not in the labour force due to mental health problems. Results: Females who retire early due to depression have a median value of total savings by the time they are 65 of $300. For those with other mental health problems the median figure was $0. This is far lower than the median value of $227,900 for females with no chronic condition who remained employed full-time. Males showed similar differences. Both males and females who were out of the labour force due to depression or other mental health problems had at least 97% (95%CI: -99.9% to -68.7%) less savings and retirement income by age 65 that those who remained employed full-time. Conclusions: People who retire from the labour force early due to mental health problems will face long term financial disadvantage compared to people who are able to remain in employment.