When can I retire?

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There seems to be some confusion among Australians as to the current retirement age, with some commentary linking this to the Age Pension age, others to the age at which you can access your superannuation.

In Australia there is no official retirement age, so you can choose to retire at any time that suits you. There is a difference though, between choosing to retire, the age you can access your superannuation benefits and the age at which you are eligible for the Centrelink Age pension. There are three key ages when considering retirement planning;

  • Preservation age
  • Age 65
  • Centrelink age pension eligibility age

Age Pension eligibility

You can apply for the Centrelink Age Pension once you attain a certain age, and this is gradually increasing from age 65 to age 67. Eligibility age is based on your birthdate4:

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Age 65

Your superannuation is preserved within the superannuation system until a ‘condition of release’ has been met, which allows you to access some or all of your benefits. One of these conditions is simply attaining age 65 (regardless of employment status), at which point all of your superannuation will become accessible.

This age is not linked to your age pension eligibility age, meaning even if you cannot access the Centrelink age pension until age 67, you can still start drawing on your superannuation savings from age 65.

Preservation age

Preservation age for superannuation varies depending on your birthdate5;

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Once you reach your preservation age as shown in the table above, you can access up to 10% of your superannuation balance each year, in the form of a superannuation pension payment.

Permanently retiring between your preservation age and 60 will also satisfy a condition of release, allowing you to access all of your superannuation benefits.

Once you reach age 60 the requirement is slightly less stringent, and you only need to cease work – not permanently retire - to satisfy a condition of release. Again, this will allow access to your full superannuation balance.

In summary, despite the government increasing the eligibility age for the Centrelink age pension, you can still access your superannuation savings at age 65 (or earlier if you meet another condition of release) and you can actually choose to retire at any age that works for you.

Now there’s some motivation to get independently wealthy!

Source: AIA

4 Source: https://www.humanservices.gov.au/customer/services/centrelink/age-pension

5 Source: http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s6.01.html