Every country has its own definition of retirement age. As you reach your Golden Years, it’s important to recognize the benefits and options available to you in your place of residence. In Australia, once you reach the retirement age, you receive what’s known as the Age Pension. In addition, you might begin to draw upon your super.
In order to qualify for the Age Pension through the government, you need to be 66.5 years old. That being said, there are a few factors that impact this process, including your date of birth. There are other income and asset requirements for this age-based benefit as well. Keep reading to answer this question once and for all: what is the retirement age in Australia?
Is There a Retirement Age in Australia?
To begin, it’s important to discuss whether there is a retirement age in Australia from a legal standpoint. In short, the answer is no. There is no such thing as a single age of retirement in any Australian laws. Anyone can retire at any age.
However, it wasn’t always this way. It wasn’t until 1993 that a legal act prevented businesses from terminating employment based on age. This means people can work far beyond the typical ‘retirement age’ if they wish. Retirement can be a highly personal choice, and it can also depend on whether your super is on track for retirement.
The Average Age of Retirement
If you’re wondering what the retirement age is in Australia, we can take a closer look at averages. According to a recent version of the government’s Retirement Review from 2020, the average age is currently between 62 and 65. Women are more likely to retire earlier than men, but this isn’t necessarily going to be the case forever.
Compared to previous generations, today’s workers are staying in the workforce for longer. As the workplace becomes more flexible and life spans increase, people are choosing to work longer in life. In addition, there are financial benefits to working for longer:
- We’re living longer and need more savings
- Our lifestyle costs are higher than previous generations
- People are more likely to carry debt later in life
- Children are less likely to support aging parents
Most importantly, the age of eligibility for the Age Pension is on the rise. As more people choose to retire later in life, the age continues to shift. If you’re waiting on government benefits to ease the transition between working and retirement, you’ll need to pay close attention to these age requirements.
What Is the Age Pension?
There are two ages you’ll need to consider when it comes to retirement benefits. The first is known as the preservation age. This is when you access your super because you’ve met the conditions of release (retirement or turning 65). Additionally, the Age Pension is a benefit you can only receive if you’ve reached the age of 66.5.
Why is the Age Pension age set at 66.5? This is because the eligibility changes depending on your year of birth. This ranges from 65 years old if you were born in the 1950s to 67 if you were born in 1957 or later. Your income also impacts just how much you’re paid as part of your eligibility. As you can see, the age of retirement in Australia is far from set in stone.
Are You Ready for Retirement?
Next, how do you know whether you’re ready for retirement? Age is truly just a number. It isn’t always the best indicator that you’re on track for retirement. With people living longer than ever, you’ll need to budget for greater savings throughout your retirement years and beyond.
Here are some things to keep in mind when asking if you’re ready for retirement:
- Eligibility: Are you eligible for retirement based on the ages explained above?
- Funding: Are you in a position to afford a comfortable or modest lifestyle at your current savings rate?
- Health: Of course, health can impact your ability to work and meet your goals.
- Opportunities: As you build your skills and experience throughout your career, your opportunities for employment will change over your life.
- Recreation: Finally, everyone deserves to enjoy his or her golden years. What are your goals as you enter this new stage of life?
Retirement isn’t one-size-fits-all. If you need help planning for retirement, don’t be afraid to ask for help. The sooner you begin planning for tomorrow, the easier it is to stay flexible no matter what life brings your way.
At Debt Busters, our team is here to help make sure your plans are on track for success. Retirement can’t be an afterthought. It’s something that’s at the foundation of your entire career. Get started with your own plan today by contacting a member of our team.