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?
For many of us, retiring at 55 is the dream. Spending your time the way you want and not having to answer to anyone except 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 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 simple guide answering common questions asked by people retiring at age 55.
1. When can I access my super savings?
To get your hands on the money in your super account, you need to have both reached your preservation age and met a condition of release.
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|
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. For more information, read SuperGuide article When can I access my super? All conditions of release explained.
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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 later in the article).
2. Can I access my super at 55 and still work?
One of the main conditions of release for super benefits under age 60 is reaching your preservation age and retiring from the workforce. That means, in most cases, it’s not possible to access your super at age 55 and continue working. The main exception to this is if you reach your preservation age and start a transition-to-retirement income stream (TTRs or TRISs) while you continue working and transition to retirement.
For more about TTRs, see the section later in this article.
3. Can I still make contributions into my super if I retire at 55?
Once you have retired from the workforce, the contributions you can make into your super account are more limited and depend on your age:
- Aged 64 and under, you can only make non-concessional (after-tax) contributions into your super account up to the annual contribution cap ($100,000 in 2020/21)
- Aged 65 and over, you can only make downsizer contributions (up to $300,000 in 2020/21). For more information, see SuperGuide article Making downsizer super contributions: 10 things you need to know.
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 reach age 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 tax free.
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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 either a lump sum or an income stream:
- 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 minimum annual payment rules.
- Lump sum – This is a single payment that withdraws some or all of your super. If you take a lump sum the money is no longer within the super system and if you invest it, any return received on the money will not be taxed as super savings. This means the concessional tax rate of 15% on your super account’s investment earnings will no longer apply. Instead, your investment earnings will be taxed at your marginal tax rate, which could be as high as 45% (plus the Medicare levy).
6. What is the average super account balance for Australians at age 55?
According to Association of Superannuation Funds of Australia research, in 2016/17 (the latest available data) the average super account balance for males aged 55 to 59 was $263,996, while for females the average was quite a bit lower at $192,378.
Unsurprisingly, the average balance for those on higher incomes tends to be higher. In 2016/17 the average super balance for a male aged 55 to 59 in the $180,000 plus tax bracket was $852,162. For females in the same tax bracket, the average was $889,785.
For Aussies in the $37,001 to $87,000 tax bracket, the averages were $217,154 for males and $195,480 for females.
Average and median super account balance 2016/17
|Average super account balance||Median* super account balance|
|Males (age 55–59)||$263,996||$137,366|
|Females (age 55–59)||$192,378||$93,035|
* Median super account balance is the balance at which 50% of individuals have a lower account balance and 50% have a higher account balance.
7. What is my life expectancy at age 55?
Life expectancy is a statistical measure that estimates 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.
That means it’s an estimate of how long a typical person is likely to live, not a prediction of how long you will live.
The estimates below are an average life expectancy for someone age 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
8. Can I start a transition to retirement income stream at 55?
A transition to retirement (TTR or TRIS) is a pension income stream from your super account that you draw down on while you are still working. It can be a way to scale back your working hours and start enjoying your retirement.
Starting a TTR can also allow you to salary sacrifice into super to save tax, while using your TTR to supplement your salary so you can maintain your 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 is 66 years for anyone born between 1 January 1954 and 30 June 1955.
Age Pension ages from 1 July 2019 are listed in the table:
|Date of birth||Age Pension age||Date that Age Pension age changes|
|Born between 1 January 1954 and 30 June 1955||66 years||1 July 2019|
|Born between 1 July 1955 and 31 December 1956||66 years and 6 months||1 July 2021|
|Born from 1 January 1957 onwards||67 years||1 July 2023|
Source: Department of Social Services
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
- satisfy the Age Pension income test
- meet Australian residency requirements.
10. Can I get a health card if I retire at 55?
If you retire at age 55, you are also 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 (see table above). This is currently 66 but is progressively 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 will generally be 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. Residency and work test rules also apply.
Briefly, the requirements in each state and territory in relation to your age are:
|State||Eligible age for Seniors Card|
|Australian Capital Territory||62 or over (From July 2020 eligibility age will be lowered to 60)|
|NSW||60 or over|
|Northern Territory||60 or over|
|Queensland||60 or over with government concession card|
|Tasmania||60 or over|
|Victoria||60 or over|
|Western Australia||63 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 or 35 years 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, there are detailed tables you can consult outlining how much both couples and singles need in the SuperGuide article How much super do I need to retire?. The article covers how much super you need to generate different annual retirement incomes ranging from $40,000 a year right up to $200,000 a year, but note that figures are based on retiring after reaching Age Pension age.
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