The average retirement age in Australia is difficult to determine. Why? Because times are changing. The previous life process of study, work, retire has evolved into study, travel, study a bit more, work, change career, semi-retire, retire.
New Superannuation legislation, specifically the Transition to Retirement Income Stream, has resulted in people working longer, as was intended when the legislation was initially enacted. This legislation allows people to access their superannuation savings while still working, provided that they have reached their Preservation Age. Consequently, the average retirement age in Australia is not clear cut.
What is the Average Retirement Age in Australia?
The Australian Bureau of Statistics found … “of the 2.3 million people who gave an age that they intended to retire, 17 per cent intended to retire at 70 years and older, 49 per cent intended to retire between 65 and 69 years and 25 per cent intended to retire between 60 and 64 years, with the average intended retirement age being 63.4 years”… in this media release.
The same report also mentions that the average retirement age in Australia for those who had retired in the past five years was as follows:
|Average for Australians who retired in the past 5 years||61.5|
|Average for Men who retired in the past 5 years||63.3|
|Average for Women who retired in the past 5 years||59.6|
Due to us living longer, the superannuation preservation age is incrementally increasing, as is the Government Age Pension. This obviously affects peoples’ ability to retire on their desired retirement income and requires them to work longer, or accept a lower level of retirement income.
Where to from here?
Around two thirds of people over age 45 who are intending to retire expect to have their main source of income to be derived from a superannuation income stream or annuity and to not primarily rely on Government benefits. This is in comparison to almost half of retired Australians who reported Government pensions or allowances as their main source of income.
I would be curious to know if the retirees of today also expected to be mostly self-funded when they were in their 40’s and 50’s – only to see things not turn out as expected. Do we manage our finances better now, with compulsory superannuation contributions, resources at our fingertips and advice on every corner? Or will half of the population find themselves continuing to survive on the Old Age Pension?
If you are over or nearing age 65 and plan on contributing to superannuation to assist in funding eventual retirement, you should ensure that you are capable of satisfying the Superannuation Work Test. This article explains what needs to be done and when. In general, you need to be gainfully employed for at least 40 hours over 30 consecutive days prior to making any contributions. Check more info here.
In order to prolong an individuals working life (to keep them paying taxes and off the Age Pension), the Government has made provisions allowing you to access part of your super while still working.
What date do you expect to retire? Is retirement getting harder? Share your thoughts and leave a reply in the comment box below.
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