A question we are often asked is ‘what will my retirement age be? ……… I hear I can’t retire until I’m 70 now?’
Retirement age is when an employee chooses to retire. Most businesses don’t set a compulsory retirement age for their employees. Therefore retirement age is an open date. You can retire when you’re aged 40… but the question is, can you afford to? Where the confusion sets in is the second part of the question, which is often referring to the age where a person can access benefits.
In Australia there are two benefits available set by Legislation:
- The Federal Government Age Pension
So in fact there are these three concepts in the retirement age mix:
– When you choose to cease work,
– At what age you can access your Super, and
– Your Age Pension eligibility
However, the most important question is to ask yourself ‘can you afford to retire?’ As this is dependent on the choices you make now.
Your accessibility to your Super and the Age Pension is determined by your Date of Birth. Here are tables setting out the qualifying ages for Superannuation and the Age Pension.
Superannuation Preservation Age
Date of birth
Preservation age (years)
|Before 1 July 1960|
|1 July 1960 – 30 June 1961|
|1 July 1961 – 30 June 1962|
|1 July 1962 – 30 June 1963|
|1 July 1963 – 30 June 1964|
|After 30 June 1964|
Note: There are a number of other circumstances in which benefits can be released, such as incapacity, severe financial hardship, temporary residents leaving Australia, terminal medical condition and terminating gainful employment. Some of these permit early access to benefits before reaching preservation age. There are specific rules for each of these and some have restrictions on the way the benefits can be cashed.
Age Pension Qualification Age
Qualifying age for men and women born before 30 June 1952 is age 65.
From 1 July 2017, the qualifying age for Age Pension will increase from 65 years to 65 and a half years. The qualifying age will then rise by six months every two years, reaching 67 by 1 July 2023.
Date of birth
Qualifying age at
|1 July 1952 to 31 December 1953|
65 years and 6 months
|1 January 1954 to 30 June 1955|
|1 July 1955 to 31 December 1956|
66 years and 6 months
|From 1 January 1957|
For example, Tom was born on 1st July 1956 and is turning 58 in 2014. He:
– can retire from the workforce as he has no restrictions by his Employer
– can access his Super, as age 55 is his Superannuation Preservation Age
– cannot access the federal Government age pension as his eligibility age is age 66 and 6 months
To summarise, you can retire at any time from the workforce, however, if you have not reached your preservation age (or fulfilled another condition of release) you cannot access your super. Also, if you haven’t reached your qualifying age, you do not have access to the Age Pension.
Australia’s population, like that of most developed countries, is ageing as a result of sustained low fertility and increasing life expectancy. Over the next several decades, population ageing is projected to have significant implications for Australia, including for health, labour force participation, housing and demand for skilled labour (Intergenerational Report 2010)
POPULATION STRUCTURE, Age and sex – Australia – 1990-2010
Source: ABS (1)
This graphic clearly shows the population ageing. This puts pressure on the federal Government as age pension costs escalate, but tax receipts from the working population is falling.
The 2014 Budget is tipped to see further changes to the Age Pension eligibility age to arrest this cost of age pensions.
It is important that you regularly review your retirement planning in order to ensure that your Cashflow and assets will meet your expected retirement lifestyle.
“This document or website contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making an investment decision. Charter Financial Planning Limited and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.”