Retirement is one of the biggest milestones in life. And while it is exciting, transitioning from a working life into a world of new adventures can also be a little, well, unnerving. So whether it’s a financial decision or a personal one, the discussion around official retirement age and what’s the right age to retire is one full of questions and emotions.
Officially, the average age you can receive the pension (and so technically the Australian ‘retirement age’) is currently 67 for most Australians. However, the real retirement age in Australia is actually more individualised as in order to retire you must take into account both your individual financial and personal considerations.
Maybe it works to retire at 60? Maybe you’d prefer to wait for the age pension at 67? Or maybe you’d like to keep working (all be it with a reduced income and workload) into your 70s (and even 80s!)?
No matter the age you choose to retire, in order to make this monumental decision you’re going to need facts. Facts like what exactly are the key details you need to know about retirement age, how do asset tests, income tests, deeming and other factors affect the age when you can retire and does your super have an effect?
So if you’re wondering what is retirement age Australia then stick around – in this guide, we’ll run through everything you need to know about the Australian retirement age and when it may be suitable for you to retire.
Understanding the Retirement Age in Australia
Individual financial aspect aside, as it stands, there are prescribed ages at which the government defines retirement age in Australia – and that may impact you when you retire.
As of 2024, the official retirement age for most Australians is 67- this actually the pension access age. Basically this is the age when you can receive a pension from the government.
It’s important to note this number isn’t a ‘fixed retirement age’ and that access to the pension changes slightly depending on your birth year (people born before 1965 will be under different legislation and have a different pension age). And similarly this current retirement age may (and probably will) change in the future, as life expectancy and other demographic factors influence our life expectancy.
Is Retirement Age the same as The Preservation Age?
A different number you may hear is ‘the preservation age’ and this is also crucial. This is the minimum age at which you can generally access your super fund benefits. While this is 60 for most Australians, be careful as the actual preservation age you can access your super can change depending on the year you were born (more info in the table below). But no matter what year, it will fall between 55 – 60.
Of course, there are exceptions! If you want to access your super before your preservation age (lucky you!), you must declare yourself as permanently retired from full-time employment and then consult your super fund directly to negotiate new terms.
On the reverse, even if you’re still in the workforce when you turn 65, your super will be available for you to draw on.
This means that while you cannot qualify for the pension until 67, you may be able to access your super as early as 55! The table below gives a quick guide to when you can access both your super and the pension based on your birth year.
Retirement Age – Pension & Super Access Age Guide:
| Birth Year | Preservation Age | Pension Age |
|---|---|---|
| 1949, 1950, 1951 | 55 | 65 |
| 1952 | 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 year 6 months |
| 1954 | 55 | 66 |
| 1955 | 55 | 66 (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, 1959 | 55 | 67 |
| 1960 | 55 (if you were born between 1 January 1960 and 30 June 1960) or 56 (if you were born between 1 July 1960 and 31 December 1960) | 67 |
| 1961 | 56 (if you were born between 1 January 1961 and 30 June 1961) or 57 (if you were born between 1 July 1961 and 31 December 1961) | 67 |
| 1962 | 57 (if you were born between 1 January 1962 and 30 June 1962)or 58 (if you were born between 1 July 1962 and 31 December 1962) | 67 |
| 1963 | 58 (if you were born between 1 January 1963 and 30 June 1963) or 59 (if you were born between 1 July 1963 and 31 December 1963) | 67 |
| 1964 | 59 (if you were born between 1 January 1964 and 30 June 1964) or 60 (if you were born between 1 July 1964 and 31 December 1964) | 67 |
| 1965 or later | 60 | 67 |
Pension Age and Government Benefits
As we touched on above, in addition to your superannuation (and any other payments you receive), a government funded pension can also help provide benefit to retirees.
In order to be eligible for these financial support payments you’ll need to be able to satisfy a number of criteria. This includes income and assets tests, deeming and the employment status of your partner.
Generally speaking, the more assets you have, the less pension you will be able to claim and be paid by the government. While each case may vary, the table below gives a rough idea to the average pension you can expect.
Pension vs Assets Quick Guide
Full Pension
| Your situation | Homeowner | Non-homeowner |
|---|---|---|
| Single | $314,000 | $566,000 |
| A couple, combined | $470,000 | $722,000 |
| A couple, separated due to illness, combined | $470,000 | $722,000 |
| A couple, one partner eligible, combined | $470,000 | $722,000 |
Part Pension
| Your situation | Homeowner | Non-homeowner |
|---|---|---|
| Single | $695,500 | $947,500 |
| A couple, combined | $1,045,500 | $1,297,500 |
| A couple, separated due to illness, combined | $1,233,000 | $1,485,000 |
| A couple, one partner eligible, combined | $1,045,500 | $1,297,500 |
Key Considerations: What’s an asset?
If you, like most Australians, have questions about the income and assets tests used to determine eligibility for government benefits the Services Australia website is the place to get the full details – however we can list a few things considered assets below:
- financial investments
- home contents, personal effects and vehicles
- real estate, annuities, income streams and superannuation pensions
- sole traders, partnerships, private trusts and private companies.
While your situation may be unique, the assets ad income tests are universal. The assets test will consider what you own, while the income test assesses how much you’re earning, including from an income stream like your superannuation or investments.Your age, status as an Australian resident, any other government benefits and whether you’ve fully stopped working also factor into the equation.
What if I still want to work – Can I partly retire?
Still love working and not sure you want to give it up completely? You’re not alone, statistics show a lot of Australians don’t want to stop working entirely when they retire. If this is you, here’s some good news – you can still receive the age pension even if you’re still working when you’ve reached retirement age.
the government will give you an allowance of up to $212 per fortnight before it effects your pension (as a single person). If you go over this amount of income while working you will be subject to payment reductions (50c for every dollar over $212) or be put on ‘part time pension’.
In a couple? Together you can earn up to $372 without any penalty with 25c reduction for every dollar earned over that amount.
The table below outlines the cutoff points for how much money you can earn per fortnight:
Cut Off Table:
| Your situation | Homeowner | Non-homeowner |
|---|---|---|
| Single | $627,750 | $879,750 |
| A couple, combined | $976,500 | $1,228,500 |
| A couple, separated due to illness, combined | $1,097,500 | $1,349,500 |
| A couple, one partner eligible, combined | $976,500 | $1,228,500 |
*Note – your cut off point may be higher if you receive money from Health Care Assistance, Rent Assistance or Work Bonuses.
Gradually Increasing Retirement Age
Australia’s retirement age has been gradually increased to reflect longer life expectancies and the shifting nature of the workforce. While this is a good thing (we’re all living longer, yipee!) it’s important to stay informed of all the rules to ensure you’re making the best decisions for you. Remeber to check back into this guide as we’ll update it any time there’s any government updates!
Retirement Choices
Even when you make the decision to retire, just over a quarter of ‘retirees’ will return to some form of employment, some out of necessity, while others see it as something they enjoy doing. So even though there may be an age of retirement in Australia, don’t let that define how you choose to retire.
There are other circumstances to consider when planning your retirement age. These considerations are often related to how you tie up loose ends at work or with your business. While they may seem incidental, they can actually have a big impact on the funds you’re entitled to.
For example, redundancy or termination payments (including outstanding annual leave) can be taxed at a lower rate than your other income. Or, if you’re selling your business, you should find out if you’re eligible for the capital gains tax retirement concession. Both of these tax breaks can make a big difference to how you set yourself up financially for retirement.
Summing things up…
Whether you’re nearing pension age or thinking long-term about retirement, it’s critical to understand how government benefits, income tests, and assets tests work.
Obviously, the information we have provided here is to give you an idea of some of the key considerations when it comes to planning for your retirement. We recommend you seek financial advice to help you make the right decisions for your future. After all, putting yourself in the best possible financial position will allow you to make the most of your retirement years with your family and friends.
Retirees can find financial support from Services Australia, but it’s crucial to save wisely, plan early, and know when to claim your payments. For more tailored advice, consult with your super fund or a financial advisor from the Australian Retirement Trust to ensure you’re prepared.
Nearing your retirement age?
It might be time to start considering your future lifestyle. Many retirees find that they feel happier, safer and more connected, living amongst their peers. Retirement village life can offer an excellent sense of community, premium amenities and regular fun activities and events. Check out our happiness report to find out what our residents think, or join us for a tour and find out for yourself!
Remember to check in as this article will be edited for government updates.