5 points to consider when deciding when to retire
The age you retire in Australia isn’t set in stone. You can really retire whenever you want to, but a number of factors could play a big part in your decision.
Your financial situation, health, employment opportunities and coordinating with your partner, if you have one, could all play a role in helping you determine when you might retire from the workforce.
5 points to consider when deciding when to retire.
Things to think about when timing retirement
1 When you can access your super
Typically, you can access your super when you've reached your preservation age and you retire. Your preservation age will depend on your date of birth. See table below for details.
Source: AMP
There could also be special circumstances under which you might access your super early. Check with your financial adviser to learn more.
2 Whether you’re eligible for the Age Pension
Your eligibility for the government’s Age Pension will come down to three things – your age, residency, as well as your income and assets, which will need to be below certain limits.
Similar to when you can access super, the age you might qualify for the Age Pension will depend on your date of birth. Check out the table below to see at what age you might qualify.
Source: AMP
For more information about residency requirements and what the income and asset cut off points are, head to Services Australia. Our financial advisers are able to provide guidance on your Age Pension eligibility and assist you with applying for the Age Pension and other government payments and services. Contact us to find out more.
3 Funding a longer retirement
Australians are living longer, so more people require a bigger pool of savings to fund the additional years after they finish working, with many having to explore the possibility of working for longer too.
To put it into perspective, the average life expectancy in Australia for a man around age 65 today is about 85, while for a woman around age 65 today, it’s 88, noting you could live longer depending on your situation3.
As for how much money you might need each year, figures from the Association of Superannuation Funds of Australia (ASFA) show individuals and couples, around age 65, who are looking to retire today, would need a certain annual budget to fund different types of retirement lifestyles. View the current figures here.
4 Your current state of health
Health is a key factor when it comes to participating in the workforce, particularly as you get older. This can affect your ability to accumulate super and other savings to fund your retirement.
This means that if you’re saving for retirement or contributing to your super fund, it may be helpful to start sooner rather than later.
5 Your social life and recreational activities
Australians are living longer and more active lives, and according to ASFA, singles and couples living a comfortable lifestyle spend a bit over 20% of their weekly budget on leisure and recreation.
With that in mind, it’s a good idea to give some thought to the hobbies and recreational activities you want to pursue once you exit the workforce. After all, your retirement is hopefully the time to sit back and enjoy some of the things you love.
Source: AMP