You'll be able to access your super between 55 and 60, depending on when you were born. And you’ll become eligible for the age pension at 65½, rising to 67 by 2023. But there's no fixed retirement age in Australia so it's up to you when you retire.
You'll need to take into account your health, your employment opportunities and your partner’s situation, if you have one. But finances will play a big role in when you decide to retire.
When can you access your super?
Generally you can access your super when you:
- reach preservation age and you retire
- cease an employment arrangement after age 60
- reach preservation age and implement a transition to retirement strategy
- turn 65, whether you remain in the workforce or not.
What is your preservation age?
Your preservation age is when you can start to access your super. It will be between 55 and 60 depending on when you were born1.
|Date of birth||Preservation age|
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|From 1 July 1964||60|
When do Australians tend to retire?
The average retirement age for people aged 45 years and over in Australia is 55.3 years. But we’re tending to retire later in life. When you narrow it down to people who’ve retired in the past five years, the average increases to 62.9 years2.
And retirement isn’t necessarily a one-time event, with more than one in four Australians between the ages of 45 and 59 returning to employment each year3.
When are you eligible for the age pension?
To be eligible for a full or part age pension from the government, you must have reached your age pension eligibility age, satisfy an income test and an assets test, as well as other requirements.
In July 2017, the qualifying age for the age pension increased to 65 and 6 months, and it will continue to increase by six months every two years until 1 July 2023 when the qualifying age will be 674.
|Date of birth||Age pension eligibility age|
|Before 1 July 1952||65 years|
|1 July 1952 - 31 December 1953||65 years and 6 months|
|1 January 1954 - 30 June 1955||66 years|
|1 July 1955 - 31 December 1956||66 years and 6 months|
|From 1 January 1957||67 years|
What do you need to think about when deciding when to retire?
When it comes to planning for retirement, it’s important to prepare yourself emotionally and financially. If you’re building your retirement plan, here are some things you may want to think about.
You may need to fund a longer retirement
Australians are living longer so more of us may need a bigger pool of savings to fund longer retirements. In 1974-75, there were 80,000 people aged over 85 and that number is projected to reach around two million by 2054-555.
To avoid some of the common money mistakes that happen during retirement, you may need to explore the possibility of working for longer and delaying retirement or consider returning to the workforce.
Your health may affect your ability to work longer
Health is a key factor when it comes to participating in the workforce, particularly as you get older. This can affect your ability to accumulate super and other savings to fund your retirement.
More people aged between 60 and 70 report fair or poor health than other Australians. It’s also predicted that by 2035, one in four men and one in five women in their 60s will have poor or, at best, fair health6.
This means that if you’re saving for retirement or contributing to your super fund, it may be helpful to start sooner rather than later.
You may need to supplement the age pension to fund your retirement
The Association of Superannuation Funds of Australia’s Retirement Standard shows that a 65-year-old single person retiring today needs an annual income of $43,601 to fund a ‘comfortable’ lifestyle in retirement, assuming they’re relatively healthy and own their home outright7.
By comparison, the maximum age pension rate for a single person is $26,268 a year8.
This means that to fund a comfortable retirement, you may need to have almost double the amount of income provided by the age pension, either through your super funds or other sources of income.
Another thing to keep in mind is the age you can become eligible for the age pension and the age you can access your super typically won’t be the same. Your access to the age pension will depend on your date of birth and other eligibility criteria, while accessing your super depends on when you reach your preservation age and retire.
You may want to have money set aside for recreational activities
Australians are living longer and more active lives. According to the ASFA Retirement Standard, singles and couples living a comfortable lifestyle spend around 20% of their weekly budget on leisure and recreation9.
So it’s a good idea to give some thought to your hobbies and recreational activities once you exit the workforce. After all, your retirement is the time to sit back and enjoy the finer things in life, so you need to be able to afford to do the things you love.
1 The Australian Taxation Office – Accessing your super table
2 ABS - Retirement and Retirement Intentions, Australia, July 2016 to June 2017 - Age at retirement
3 The Household, Income and Labour Dynamics in Australia (HILDA) Survey 2017 page 66 paragraph 3, page 67 paragraph 1
4 Department of Human Services - Age Pension (eligibility and payment rates)
5 2015 Intergenerational Report – Australia in 2055 page viii paragraph 5
6 AMP.NATSEM 2015 report, Going the distance: Working longer, living healthier page 27
7 ASFA Retirement Standard
8 Department of Human Services - Payment rates for Age Pension table 1
9 ASFA Retirement Standard - Detailed budget breakdowns December quarter 2018 page 4
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