September 7, 2023 | 7 min read
Summary: There isn't an official retirement age in Australia but there are generally two age rules that impact when most Australians can retire - preservation age and the age pension.
Contrary to what many people think, there’s no fixed retirement age in Australia, nor any laws that dictate when someone can retire. So, it’s completely up to you when you want to give up work for good or simply cut back on your work hours.
But while most of us may dream of retiring early, there are generally two age rules that impact when most Australians can retire as they allow you to access funds to support your retirement. These are:
Your super is designed to help fund your retirement. Generally, it’s only possible to withdraw your super after you’ve reached your ‘preservation age’ which is between 55 and 60, depending on when you were born. The table below can help you identify your preservation age:
|Date of birth||Preservation age|
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
From 1 July 1964
However, although you can start accessing some of your super once you reach your preservation age, you won’t have full access to your super until you’ve also met a condition of release.
You can start accessing some of your super in the form of an income stream while you’re still working and have reached your preservation age. But, if you want to withdraw your super as a cash lump sum, you need to meet a condition of release. Conditions of release, which allow you to receive lump sums from your super, include:
A transition to retirement pension enables you to access your super as an income stream before you retire but have reached your preservation age.
Through a transition to retirement pension you can choose to work less, or continue working the same hours while making your own contributions into super. In both cases, you can use the income from your transition to retirement pension to supplement any reduction in your take-home pay.
For example, you can gently transition into retirement by remaining in the workforce but on a part-time basis. To maintain the same level of income, a transition to retirement pension allows you to make up the difference in lost income from your super. And as you’re still employed, your super savings will continue to be contributed to as well.
While this can be a useful way to supplement your income, accessing your super may reduce the amount of retirement savings you have left to fund your eventual retirement.
Another drawback is you are required to receive a minimum pension payment of 4% of your transition to retirement pension account balance each financial year, with a maximum pension payment of 10%.
To be eligible for a full or part Age Pension from the government, you must have reached your pension age, satisfy an income test and an assets test, as well as other requirements.
From 1 July 2023, the qualifying age for Age Pension is 67. This applies to those born on or after 1 January 1957. If you were born prior to this date, you have already reached your age pension age as it was less than 67.
If you're eligible for the Age Pension, the amount you'll receive will depend on whether you're single, a couple or illness separated couple, the amount of income you earn and the value of your assets (such as property, investments and cars but excluding the home you live in). Super is assessed under both the income and assets test.
The Age Pension is made up of a basic rate, as well as a pension supplement and energy supplement.
There are different rates of Age Pension payments for single and partnered people. The current maximum fortnightly payments are:
Partnered (living together)
Partnered (apart due to ill health)
Maximum basic rate
Maximum Pension Supplement
Source: Services Australia. Applicable 20 March 2023 to 19 September 2023
*Annual amounts are approximate
Working out your entitlements isn’t always straightforward. You can find out more regarding your eligibility and entitlement to the Age Pension payment through Services Australia or refer to our article to figure out if your eligible for the Age Pension.
The amount needed each year in retirement will be different for everyone, but the Association of Superannuation Funds of Australia (ASFA) estimates that Australians aged 65-84 who own their own home and are in relatively good health, will need the following amount of money each year (June quarter 2023):1
|Total per year||Comfortable lifestyle p.a.||Modest lifestyle p.a.|
The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement.
A modest retirement lifestyle is considered better than the Age Pension, but still only able to afford fairly basic activities. A comfortable retirement lifestyle allows retirees to maintain a good standard of living (including better consumer goods), private health insurance and recreational activities.
Working out how much is enough for your retirement depends on many factors, such as your plans, lifestyle and the number of years you expect to spend retired. Additionally, estimating how much you’ll have when you plan to retire depends on factors such as your current salary, super balance and assets.
By using our personal super calculator and tools, you can get an indication of how much super you may have in retirement and how long your super may last. You can also see the impact that changing items like your income goal, retirement age, contribution amounts or investment mix may have on your results.
There’s no magic age at which to retire, and it’s a very personal decision. But deciding when to retire will depend on a range of factors, and you’ll need to consider what kind of lifestyle you want to have in retirement. You’ll also need to understand whether you’ll have enough money to support this.
To ensure you have sufficient funds to enjoy your retirement, we recommend you visit the retirement section on our website, which includes a range of tools and resources to help kick-start your retirement planning.
You may also want to consider speaking to a financial adviser. They can help you determine how much you should save and invest each month to reach your retirement goals and whether your investment strategy is right for you. They can also identify any tax savings or government benefits that may be available to you.
When was the retirement age raised to 67 in Australia?
As of 1 July 2023, Australians born on or after 1957 will have to wait until they’re 67 years old—up from 66 years and six months—before they can apply for the Age Pension.
This age requirement also applies to the Commonwealth Seniors Healthcare Card.
What age can I access my super in Australia?
You can access your super when you retire and reach your preservation age which is between 55 and 60, depending on when you were born.
There are some circumstances where you may be able to access your super earlier.
When can I access my super tax free?
Generally, once you reach age 60 your super payments are tax free.
As one of the largest pension providers in Australia,* we know that growing and keeping your money safe is important. When it comes to support, we go the extra mile—providing general pension advice at no additional cost.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.