With no definitive retirement age in Australia, the date you exit the workforce will probably come down to personal circumstances and whether you can afford it.
The retirement age in Australia isn’t set in stone. You can really retire whenever you want to, but health, financial commitments and your ability to fund the lifestyle you want will play a big part.
For this reason, you may want to consider the age you’ll be able to access your super and the government’s Age Pension (if you’re eligible for it), which typically won’t be at the same time.
If it’s something you’ve been thinking about, here’s some other related information.
The average retirement age for persons aged 45 years and over in Australia, according to 2016–17 statistics, is 55.3 years—58.8 years for men and 52.3 years for women.
Figures released last year also revealed that more Australians were retiring later in life in comparison to years gone by and retirement was not necessarily a one-time event, with 26.7% of those in the 45 to 54 and 55 to 59 age groups returning to employment annually.
Generally you can access your super when you:
Your preservation age is when you can start to access your super. It will be between 55 and 60 depending on when you were born.
Check out the table below to see what your preservation age is.
| 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 |
If you’re wondering what you might do with your super money when you do access it, remember there will be a number of things to weigh up and look into.
Taking super as a lump sum
A lump sum could help you pay off your home loan or other outstanding debts, but there may be tax implications to consider and you should think about what you’ll live on if you have no super left.
The government’s Age Pension could be one option, although if you’re pinning your hopes entirely on government support, you should consider the sort of lifestyle it might fund.
June 2017 figures show a 65-year-old retiring today needs an annual income of $43,695 to fund a ‘comfortable’ lifestyle in retirement, assuming they are relatively healthy and own their home outright. By comparison, the max Age Pension rate for a single person is around $23,254 annually.
Moving it into an account-based pension (or allocated pension)
If you’re thinking that you’d like to receive a regular income in retirement, an account-based pension (or allocated pension) could be a tax-effective option.
While the most you’ll be able to transfer into these pension accounts is $1.6 million, you won’t be limited to what you can take out. However, each year you’ll need to withdraw a minimum amount.
Purchasing an annuity with your super
An annuity provides a series of regular payments over a number of years, or for the remainder of your life, depending if you opt for a fixed-term or lifetime annuity.
You will however be sacrificing some flexibility, as you can’t easily make lump sum withdrawals and life expectancy is also a major consideration.
Currently, to be eligible for a full or part Age Pension from the government, you must be 65 or older and satisfy an income and assets test, as well as other requirements.
In July, 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 67.
You can check out your Age Pension eligibility age below.
| 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 |
Meanwhile, it’s important to remember that what you do, and at what time you do it, could have tax implications and may impact your social security entitlements. This is why it’s important you do your research and explore the alternatives with your financial adviser.
Generally, you can, but if you previously declared your permanent retirement, you may need to prove your intention was genuine at the time.
According to retirees who did return to full or part-time employment, the most common reasons why they decided to go back to the workforce was financial necessity, followed closely by boredom.
We’re here to help
A financial adviser can provide you with advice to help you to start a transition to retirement. To find out more, contact Avante Financial Services on 1300 788 650 today.
