Reading time: 7 minutes
On this page
- 1. When can I access my super savings?
- 2. Can I access my super at 55 and still work?
- 3. Can I still make contributions into my super if I retire at 55?
- 4. What are the tax implications of retiring at 55?
- 5. What are the options for withdrawing my super benefit?
- 6. What is the average super account balance for Australians at age 55?
- 7. What is my life expectancy at age 55?
- 8. Can I start a transition-to-retirement income stream at 55?
- 9. Can I get the Age Pension if I retire at 55?
- 10. Can I get a health card if I retire at 55?
- 11. Can I get a state Seniors Card if I retire at 55?
- 12. How much super do I need to retire at 55?
For many of us, retiring at age 55 is the big dream. Spending your time the way you want and not having to answer to anyone but yourself.
If that’s your plan, it’s important to ensure you understand the rules on accessing your super, how big your nest egg needs to be, the tax implications of retiring and any financial assistance you may be able to receive.
To help you take the leap into life after work, SuperGuide has put together a list of some of the common questions asked by people thinking about retiring at 55.
1. When can I access my super savings?
To get your hands on the money in your super account, you need to have reached your preservation age and also met a condition of release (see below).
Your preservation age is not the same as the age you can apply to receive the Age Pension. Your preservation age only relates to accessing the benefits in your super account.
Your preservation age varies depending on your date of birth. If you were born after 1 July 1964, you are not permitted to access your super benefit until you reach age 60.
| 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 |
Discover your personal preservation age and Age Pension age with our Retirement age calculator.
Once you have reached your preservation age it’s easier to access your super benefits, but you still need to meet a condition of release and some of these restrict whether you can take a lump sum or income stream from your savings.
When you meet a condition of release and apply to access your super benefit, you can generally choose to withdraw an amount from your super as an income stream, lump sum or a combination of the two. The option you choose will have an impact on the amount of tax you pay (see Question 4).
2. Can I access my super at 55 and still work?
One of the main conditions of release allowing you to access your super benefits before you turn 60 is reaching your preservation age and retiring from the workforce.
In most cases, this means it’s not possible to access your super at age 55 and continue working.
Learn about ceasing employment vs retiring.
The main exception to this is if you reach your preservation age and start a transition-to-retirement pension or income stream (TTR or TRIS) while you continue working and begin easing into retirement (see Question 8).
3. Can I still make contributions into my super if I retire at 55?
In the past, once you retired from the workforce the contributions you could make into your super account were fairly limited. As you were not employed, your super fund was unable to accept your contributions.
In recent years this has changed, with new rules applying from 1 July 2022 breaking the traditional link between employment and the ability to contribute to your account. If you are:
- Aged under 75, you are free to make most types of contributions (such as non-concessional contributions, salary–sacrifice and downsizer contributions) into your super account without having to worry about being employed and meeting the requirements of a work test.
- Learn about the work test.
The only exception to this is tax-deductible super contributions. From 1 July 2022, once you reach age 67 you are required to be ‘gainfully employed’ for at least 40 hours in a period of 30 consecutive days during the financial year in which you wish to make your tax-deductible super contribution.
- Aged 75 and over, you can no longer make contributions into your super account. (The only exceptions are non-concessional contributions made in the 28 days following the month in which you turn 75, downsizer contributions and mandated super contributions, such as Super Guarantee contributions your employer is required to make on your behalf.)
4. What are the tax implications of retiring at 55?
The key point to remember when it comes to accessing your super account if you retire at 55 is you will generally pay more tax than if you wait until you reach age 60.
Taking your super before you turn 60 can have a significant impact on how much – if any – tax you pay when withdrawing your super benefit, as super withdrawals after age 60 are generally free of any tax.
The tax rules for withdrawing your super savings if you retire before age 60 are complex. If you withdraw some of your super benefit under the age of 60 but after you have reached your preservation age, you will pay tax on some elements of your super benefit.
5. What are the options for withdrawing my super benefit?
When you withdraw your super savings at retirement, you can choose to take a lump sum, an income stream or a combination of both:
- Income stream (super pension or annuity) – If you decide to take a super income stream, you will receive a series of regular payments from your super fund. These must be paid at least annually and must meet the minimum annual payment rules set by the government.
- Lump sum – This is a single payment whereby you withdraw some or all of your super. If you take a lump sum the money is no longer within the super system; if you invest it outside super, any investment returns received on the money will not be taxed at super’s concessional tax rate of 15%. Instead, your investment earnings will be taxed at your marginal tax rate, which could be as high as 45% (plus the Medicare levy).
Remember, if you retire at 55 and withdraw your super savings, you miss out on the benefits of compound interest and the tax benefits available within the super system that would continue if you were to leave your savings in super for longer. This can have a significant impact on how much income you have in later years.
6. What is the average super account balance for Australians at age 55?
According to Association of Superannuation Funds of Australia (ASFA) research using ATO figures, in June 2019 (the latest available data), the average super account balance for males aged 55 to 59 was $286,283, while for females the average was quite a bit lower at $209,653.
Before you get too worried you don’t have enough saved to retire, it’s worth remembering the average account balance is relatively high because it’s the total of all the super balances in an age group, divided by the number of account holders. If you have a small number of people in your age group with very high account balances, it can push up the average balance.
A better figure to look at is the median account balance in your age group. The median is the middle account balance of an age group – 50% of the age group will have a higher balance and 50% will have a lower balance.
As you can see from the table below, there is a significant gap between the average and median balance for men and women around retirement age.
Average and median super account balance June 2019
| Average super account balance | Median* super account balance | |
|---|---|---|
| Males (age 55–59) | $286,283 | $162,337 |
| Females (age 55–59) | $209,653 | $109,639 |
Source: ASFA Developments in account balances: Superannuation account balances for various demographic groups, March 2022 using ATO data.
7. What is my life expectancy at age 55?
Life expectancy is a statistical measure estimating how long a typical person of a specific age and sex is likely to live. It’s based on your year of birth and gender, but does not consider your circumstances, such as your personal health, family history, diet or lifestyle.
This means it’s a population estimate of how long a typical person is likely to live, not a prediction of how long you will live.
The estimates below are the average life expectancy for an Australian male and female aged 55 based on national statistics, without taking into account any personal factors such as your health or family history.
Estimated life expectancy at age 55
| Expected remaining years of life | Life expectancy | |
|---|---|---|
| Male | 28 years and 4 months | 83 years and 4 months |
| Female | 31 years and 6 months | 86 years and 5 months |
Source: 2015–17 Australian Life Tables, Australian Government Actuary. The Australian Life Tables are released every five years, with the next report with updated life expectancy figures to be released in 2024.
8. Can I start a transition-to-retirement income stream at 55?
A transition-to-retirement income stream (TTR or TRIS) is a pension paid to you from the money you have saved in your super account while you are still working. In some circumstances it can be a good way to scale back your working hours and start enjoying your retirement without reducing your income.
Starting a TTR can also allow you to salary sacrifice into your super account to save tax, while using your TTR income stream to supplement your salary so you can maintain your current lifestyle.
You are eligible to start a TTR if you have reached your preservation age, are still working and are a member of an accumulation super fund (90% of Australians are in these funds.)
9. Can I get the Age Pension if I retire at 55?
To be eligible for the Age Pension, you must have reached the current Age Pension eligibility age, which from 1 July 2021 is 66 years and 6 months. People born on or after 1 January 1957 will need to wait until they turn 67, which comes into effect from 1 July 2023.
In addition to the age requirement, whether you are eligible for an Age Pension depends on you being able to satisfy the Age Pension assets test, income test and residency requirements.
Use our Age Pension calculator to estimate how much you could be eligible to receive.
10. Can I get a health card if I retire at 55?
If you retire at age 55, you are ineligible for the Commonwealth Seniors Health Card (CSHC). This concession card gives you access to cheaper health care, medications and, potentially, government services.
To qualify for a CSHC, you must have reached your Age Pension eligibility age, which depends on your date of birth. This is currently 66 years and 6 months but is being increased to age 67 from 1 July 2023.
11. Can I get a state Seniors Card if I retire at 55?
Unfortunately, if you retire at age 55 you are generally ineligible for your state Seniors Card.
The eligibility rules for a Seniors Card are different in each state and territory (and they change regularly), but the general rule is you need to be aged at least 60 to apply for a state Seniors Card.
Briefly, the requirements in each state and territory in relation to your age are:
| State | Eligible age for Seniors Card |
|---|---|
| Australian Capital Territory | 60 or over |
| NSW | 60 or over |
| Northern Territory | 60 or over |
| Queensland | 60 or over with government concession card 65 or over without government concession card |
| South Australia | 60 or over |
| Tasmania | 60 or over |
| Victoria | 60 or over |
| Western Australia | 64 or over |
Note: Residency and work test rules also apply when you apply for a Seniors Card.
12. How much super do I need to retire at 55?
When you retire from the workforce at age 55, you are likely to be spending 30 years or more in retirement, so you’ll need to create a retirement income stream that lasts a long time.
If you retire at age 55, the amount of super you will need to fund your retirement lifestyle depends on lots of factors, including:
- How many years you will spend in retirement
- Whether you are a couple or single
- How much you plan to spend each year
- Whether you own your home
- What assets or income you have outside super
- How much your investments earn
- Whether you are eligible for the Age Pension
- How much super you want to leave your dependants.
To help get you started, we have detailed tables you can consult outlining how much both couples and singles need in retirement.
Check out how much super you’ll need to retire.
