Decades of hard-work, early mornings and dealing with difficult bosses has no doubt left you dreaming of the day you can embark upon one of life’s greatest adventures – retirement. And, with no official retirement age in Australia, it is possible for you to give up the daily grind for good as early as you like, providing you have all your finances in order.
While no one can force you to retire, most people choose to do so in their mid to late 60s as there are age restrictions on when you can access your superannuation or qualify for the Age Pension – and you won’t be able to set off on that trip of a lifetime or spoil our grandkids if you don’t have enough pennies in the piggy bank.
So, if you are thinking about retiring and would like to do so while you are still young, active and adventurous enough to make the very most of this exciting stage of life, here’s everything you need to know about retiring early in Australia.
If you have managed your money well and added to your superannuation over the years, then these funds will ease the financial pressures later in life and help you live out the retirement you had always hoped for. Unless you fall under specific circumstances such as severe financial hardship, compassionate grounds, temporary or permanent capacity or a terminal medical condition, you’re usually not able to access your super until:
The preservation age is the earliest age you can access your super if you are retired, or are transitioning into the retirement income stream. However, the age isn’t the same for everybody and depends of when you were born, as outlined by the Australian Taxation Office:
It’s also smart to use a super calculator before handing in that final resignation notice. There are plenty available online with the Australian Securities and Investments Commission, Money Smart tool a handy resource to have on hand. By keying in a few basic details such as your age, income, desired retirement age and current super balance you’ll be given an estimate of how much superannuation you’ll likely have when you retire and how fees will affect your final payout.
The Age Pension has been a hot topic of late with many over-60s claiming it simply isn’t enough for them to get by, while others say the age to access it is too high, meaning they have to work longer to maintain finances. Currently to obtain the welfare payment from Centrelink you must be aged 66 or older, however, this is going to rise in the coming years with the government announcing an increase to 67 years by six months, every two years until it has reached 67 on July 1, 2023. It first started started rising on July 1, 2017, when it increased from 65 to 65.5.
There were plans in 2014 to increase the age even further to 70, but these were shot down by Prime Minister Scott Morrison last year in one of his first major announcements as the Liberal Party leader. In a live television announcement the politician claimed he would reverse previous decisions and instead keep the age at 67, meaning those born after 1965 will not have to work until they are 70 to receive the payment.
As with superannuation, the age you qualify for the Age Pension is dependent on your birthdate as set out by the Department of Human Services.
Meanwhile, there are other factors that affect someone’s eligibility for the Age Pension such as you must be an Australian resident and go through an income test and an assets test, which will help to determine how much or little is received from the government. As of September 20, for singles living independently the amount sits as $933.40 a fortnight, whereas couples receive $1,407.