The age you retire in Australia isn’t set in stone. You can really retire whenever you want to, but your health, financial situation, employment opportunities, individual preferences, and wanting to coordinate with your partner, could play a big part.
If it’s something that’s been on your mind, here are some things you might be interested to know or want to consider.
The average retirement age for people 45 years and over in Australia, according to figures from the Australian Bureau of Statistics, is 55.3 years. However, when looking at those who’ve retired more recently (in the last five years), the average age is 62.9 years1.
A separate survey echoed these findings, saying that more Aussies were retiring later in life in comparison to years gone by. It was also added that retirement was not necessarily a one-time event, with 26.7% of those between the ages of 45 and 59 returning to employment annually2.
Things to consider when timing your retirement
When it comes to exiting the workforce, here are some things you may want to think about.
You might be looking at funding a longer retirement
Australians are living longer, so more people require a bigger pool of savings to fund additional time in the years after they finish working, with many having to explore the possibility of working for longer. To put it into perspective, in 1974-75, the number of people over age 85 was 80,000 and in 2054-55 that number is projected to reach around two million3.
Your health may affect your ability to work longer
Health is a key factor when it comes to workforce participation for mature-aged workers, and subsequently in your ability to accumulate super and private savings to fund your retirement. Research shows the key issue for Australians is that between 60 and 70 years of age, the proportion of people reporting fair or poor health increases with predictions that by 2035, one in four men and one in five women in their 60s will have poor or at best, fair health4.
The Age Pension alone mightn’t be enough
March 2018 figures from the Association of Superannuation Funds of Australia show a 65-year-old single person retiring today needs an annual income of $42,764 to fund a ‘comfortable’ lifestyle in retirement, assuming they’re relatively healthy and own their home outright5. By comparison, the maximum Age Pension rate for a single person is currently $23,597.60 annually6.
Another thing to keep in mind is the age you’ll be able to access the government’s Age Pension (if you’re eligible for it) and any super that you might have typically won’t be at the same time, and will be based on your date of birth.
You may want extra money set aside for recreational activities
Australians are living longer more active lives, so another thing to give some thought to is keeping some money aside for your own pastimes and recreation. According to figures singles and couples living a ‘comfortable’ lifestyle currently spend around 20% of their weekly budget on leisure and recreation7.
1 ABS - Retirement and Retirement Intentions, Australia, July 2016 to June 2017 - Age at retirement
2 The Household, Income and Labour Dynamics in Australia (HILDA) Survey 2017 page 66 paragraph 3, page 67 paragraph 1
3 2015 Intergenerational Report – Australia in 2055 page viii paragraph 5
4 AMP.NATSEM 2015 report, Going the distance: Working longer, living healthier page 27
5 ASFA Retirement Standard table 1
6 Department of Human Services - Payment rates for Age Pension table 1
7 ASFA Retirement Standard - Detailed budget breakdowns March quarter 2018 page 4
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