Born in 1968: When Can I Retire?

When can you retire if you were born in 1968?

Retirement is based on your ability to cover living expenses without needing to earn a work-related income.

You may choose to continue working after reaching retirement, but it is good to know your full retirement age.

If you were born in 1968, there is a number of definitions of retirement.

You may wish to know what age you can access your superannuation.

You might want to know what age you can collect social security payments, such as the Centrelink Age Pension.

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Or, you might simply want to know when you can afford to retire.
 

Born in 1968: What Age Can I Retire?

 
Theoretically, you can retire at any age.

If you have sufficient investments producing enough of an income to cover your expenses, you can retire whenever you like.

However, more often than not, the retirement age for someone born in 1968 will coincide with when they can access their super or collect social security.

Given that the age you can first access your super comes before the age you can collect social security, we will begin with superannuation.
 

Superannuation: When Can I Retire?

 
Accessing your superannuation is based on your age and employment status.

Provided you have reached your superannuation preservation age, you can access your super before or after full retirement.

Your preservation age is the first time you can withdraw your super in some form or another.

The table below details your superannuation preservation age.

Date of Birth Preservation Age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1960 – 30 June 1961 57
1 July 1960 – 30 June 1961 58
1 July 1960 – 30 June 1961 59
After 1 July 1964 60

As you can see, being born in 1968 means your preservation age is 60.
 

Option 1: Transition to Retirement (TTR) Pension

 
Once you reach your superannuation preservation age of 60, you can use your super to start a TTR Pension.

To do this, you notify your super fund of how much of your super balance you would like to use to start a TTR Pension.

Be mindful that, if you will continue to work, you may consider keeping a balance in your super accumulation account, so that the account remains open to accept future super contributions.

Also, your super accumulation account may have insurance within the account. If you close the account, the insurance will be cancelled and you will no longer be covered.

You are able to commence a TTR Pension with your super regardless of your employment status.

By starting a TTR Pension, it enables you to receive an income of between 4% and 10% of the account balance each financial year.

Payments are generally made monthly, but you may be able to opt to receive them fortnightly, quarterly or annually.

Payment frequency will be determined by your superannuation provider.

A TTR Pension is designed to allow you to transition into retirement without needing to retire in full (i.e. reduce to part-time hours).

Alternatively, you may consider using a TTR Pension to implement a tax-effective TTR Strategy.

A TTR Pension does not allow you to make lump sum withdrawals or pension commutations.

You can, however, roll a TTR Pension back to accumulation phase.

The tax on investment earnings within a TTR Pension is a maximum of 15%.
 

Option 2: Full Retirement

 
If you are over age 60 and are retired from work with no intention of returning to work, then you have met a full condition of release.

A full retirement condition of release gives you unrestricted access to your retirement savings.

Under this scenario, you are able to make lump sum withdrawals from super, or use your super to start an account based pension.

A lump sum super withdrawal is simply a withdrawal of any amount from your accumulation account.

If you decide to start an account based pension, you can receive as much or as little income as you like, subject to the minimum pension factor, which is based on your age.

The minimum pension payment factor is detailed in the table below.

Age Minimum Withdrawal %
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-94 11%
95 of higher 14%

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Unlike a TTR Pension, an account based pension has no upper threshold.

The maximum income you can draw each year from an account based pension is only limited by the account balance.

You can also make pension commutations at any stage, or roll your pension back to accumulation phase.

All investment earnings within an account based pension are received tax free.

Investment earnings within an accumulation account are taxed at up to 15%.
 

Option 3: Ceasing An Employment Arrangement

 
Option 1, above, explains how you can have limited access to your super if you continue to work past your preservation age.

Option 2 explains how you can have full access to your super if you are retired with no intention of returning to work.

Option 3, ceasing an employment arrangement, sits in the middle.

The superannuation rules allow you to have full unrestricted access to your super if an employment arrangement in which you were gainfully employed comes to an end on or after reaching age 60.

Basically, this means that finishing work with an employer, or closing down your own business, after age 60, usually constitutes full retirement.

In this instance, you are still permitted to return to work, while retaining full access to your super.

You can access your super in the form of a lump sum or income stream.

You will be able to continue making withdrawals from super, even if you start a new job or business.

However, any additional contributions made to your super account, after ceasing the employment arrangement, will not be accessible.

Subsequent contributions will remain preserved until you meet another condition of release.
 

Option 4: Reaching Age 65

 
Once you attain age 65, your employment status becomes irrelevant.

Age 65 gives you unrestricted access to all of your super savings.

Once you reach age 65, you can use your super to begin an income stream, receive a lump sum payment, or a combination of the two.
 

Social Security: When Can I Retire?

 
One of the main conditions to be eligible to collect retirement social security payments is reaching Age Pension age.

Being born in 1968 means that you can apply for social security when you reach age 67.

Reaching Age Pension age is not the only requirement in being eligible for Age Pension payments.

You also generally need to have been an Australian resident for at least 10 years and be under the income and assets test limits.

The income test and the assets test will determine your level of entitlements.

The test that will apply will be the one that results in you receiving the lowest level of Age Pension payments.

The income test and assets test are ongoing and apply at any given moment based on your assessable income and assets at that moment.

Each test has a lower and upper threshold.

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If your income and assets are below the lower threshold of each test, your will receive the full Age Pension.

If your income or assets are above the lower threshold, but below the upper threshold of either test and your income or assets are not above the upper threshold of either test, you will receive a part-Age Pension.

If your income or assets are above the upper threshold of either test, you will not be eligible for any Age Pension payments.
 

When Can I Retire If I Was Born in 1968?

 
You can retire whenever you like if you were born in 1968, provided you can afford to do so.

The earliest you can access your super is age 60, if you were born in 1968.

The earliest you can be eligible for Age Pension payments is age 67, if you were born in 1968.

Through the use of a TTR Pension, you may consider reducing your work hours from age 60 and supplementing your reduced income with TTR Pension income.

Alternatively, you may consider utilising a TTR Strategy to boost your super savings by reducing tax.

Or, you may simply work through until age 67, so that the Age Pension can supplement and superannuation pension income, assuming you are under the Centrelink income and assets test.

Hopefully this helps you understand what age you can retire if you were born in 1968.

Chris Strano

Chris Strano created SuperGuy to help the average punter navigate through the complex and ever-changing super rules. It has since become one of Australia's leading digital super resources. Subscribe to SuperGuy's YouTube channel for the latest strategies to boost your super savings. https://www.youtube.com/c/superguyau

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