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“What is Australia’s retirement age?” or “What age can I retire?” are common questions. The simple answer is “it depends”.
There’s no such thing as a ‘retirement age’ in Australia, nor any laws that dictate when someone can retire. In theory, you can choose to retire whenever you want.
A better question to ask would be “When should I retire?”. That’s a very personal decision that depends principally on when you can financially support the lifestyle you want to lead in retirement, unless ill health or other factors make the decision for you.
So, at what age do most Australians retire?
The average age of retirement
According to the government’s Retirement Income Review released in November 2020, the average age of retirement in Australia is currently between the ages of 62 and 65, with women tending to retire one to three years before men. But things are changing.
For a variety of reasons, today’s retirees are likely to stay in the workforce for longer than previous generations. In fact, the workforce participation rate for those aged 60 to 64 increased 22 percentage points over the 20 years to 2020. Improved health outcomes, greater workforce flexibility allowing a gradual transition into retirement, and higher average levels of education requiring less physical work are contributing factors to a trend that is likely to continue.
But for some people there are also financial imperatives to work a little longer. These may include:
- We are living longer and need to save more for our retirement or run the risk that our savings will run out
- Our lifestyle expectations are higher than they were for previous generations
- More of us are carrying a mortgage and other debt later in life
- Our children are leaving home later, leaving us with less time to boost our retirement savings
- The age of eligibility for the Age Pension is rising.
This last point puts a floor under retirement decisions for many Australians. Given that today’s retirees have not had the full impact of compulsory super throughout their working life, the Age Pension still supplements the income of around 65% of retirees.
When can I access my super or the Age Pension?
In practice, there are two age rules that impact when most Australians can retire because they allow you to access funds to support your retirement. These are:
- Preservation age: This is the age when you can access your super provided you have also met a condition of release (such as retiring or turning 65).
- Age Pension age: This is the age when you can access Australia’s Age Pension, provided you’re an Australian resident and you pass both the income test and the assets test.
|Birth year||Preservation age||Age Pension age|
|1949, 1950 or 1951||55||65|
(if you were born between 1 January 1952 and 30 June 1952)
or 65 years and 6 months
(if you were born between 1 July 1952 and 31 December 1952)
|1953||55||65 years and 6 months|
(if you were born between 1 January 1955 and 30 June 1955)
or 66 years and 6 months
(if you were born between 1 July 1955 and 31 December 1955)
|1956||55||66 years and 6 months|
|1957, 1958 or 1959||55||67|
(if you were born between 1 January 1960 and 30 June 1960)
(if you were born between 1 July 1960 and 31 December 1960)
(if you were born between 1 January 1961 and 30 June 1961)
(if you were born between 1 July 1961 and 31 December 1961)
(if you were born between 1 January 1962 and 30 June 1962)
(if you were born between 1 July 1962 and 31 December 1962)
(if you were born between 1 January 1963 and 30 June 1963)
(if you were born between 1 July 1963 and 31 December 1963)
(if you were born between 1 January 1964 and 30 June 1964)
(if you were born between 1 July 1964 and 31 December 1964)
|1965 or later||60||67|
Deciding when you should retire is an important financial decision. You can use the preservation and Age Pension eligibility ages as a guide, but it’s worth seeking independent professional advice based on your financial circumstances and goals. Doing this will help you make a decision that will enable you to lead a lifestyle you can afford in retirement.
The information contained in this article is general in nature.