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When Should I Retire? (it’s up to you!)

June 28, 2022

Wondering what the best age to retire is?

Wondering what the best age to retire is? The answer is different for everyone. Did you know that you can choose when you retire? While the average age of retirement in Australia is 63 years, making the decision about the best age to retire for you is entirely personal.

If you’re dreaming about retiring and asking, “when should I retire?” there are some other questions you need to answer before making this decision.

Deciding when is the best age to retire takes time. As a huge milestone, it’s important to approach retirement with thorough planning and preparation, considering your finances, family situation, health and retirement lifestyle plans – and of course how much you love (or are keen to leave) your job!

Sometimes, the decision to retire is taken out of your hands due to ill health, redundancy or unemployment.

Nevertheless, the age you are when you retire is up to you, as there is no legal retirement or stop work age in Australia. So, as long as you have the finances to support your retirement lifestyle, the choice is yours!

Many people assume that once they’ve reached their preservation age, it’s time to retire. This isn’t necessarily the case. Just because you’re legally able to access your Super in your late 50s or early 60s (whether you’re retired or not) doesn’t necessarily mean it’s the best option for your situation.

On average, Australians plan on retiring at around 65 years of age. Most Australians retire between 55 and 69.

The government is generally the main source of income for retirees, followed by Super, annuities or account-based pensions.

We’ve put together everything you need to know and consider when deciding on your best age to retire.

When should I retire? Contact us anytime to get the conversation started:

When Should I Retire? 11 Questions to Ask.

1. When will I be eligible to access my Super?

People who ask us “when should I retire?” or “when can I retire?” are often assuming that once they reach the age where they are able to access their Super or Age Pension, retirement is the obvious next step. This often isn’t the case.

Even if you’ve reached your preservation age, it doesn’t necessarily mean that this is the best age to retire.

Preservation Age

This is the age (between 55 and 60) when you’re able to access your Super and depends on your date of birth. Here is a simple table to help you ascertain your Preservation Age:

Birthdate Preservation Age

Any time before July 1, 1960 55

July 1, 1960 – June 30, 1961 56

July 1, 1961 – June 30, 1962 57

July 1, 1962 – June 30, 1963 58

July 1, 1963 – June 30, 1964 59

Any time after July 1, 1964 60

See: https://www.ato.gov.au/individuals/Super/in-detail/withdrawing-and-using-your-Super/withdrawing-your-Super-and-paying-tax/?page=2#:~:text=Your%20preservation%20age%20is%20the,met%20a%20condition%20of%20release

2. Can I partly retire?

Once you’ve reached preservation age, you are eligible to retire – either fully or partially. You may decide to continue working part time, replacing some of your lost income with your retirement pension. Selecting this option allows you to preserve your nest egg, while you ease into retirement.

Now that we’re living longer, partial retirement is becoming more common. Some choose to keep their current job, cutting down their hours to a part time load while others work as a consultant in their field of expertise.

There are financial incentives – such as accessing your Super tax free – which you may like to consider, for those who delay retirement beyond age 60.

And while finance is a huge part of your decision-making process around when may be the best age for you to retire, another thing to consider are the things on your bucket list that you’ve been looking forward to doing for a very long time. Many people find that partial retirement is a great way to get started on ticking some items off your bucket list while still retaining part time work.

The most important thing is that you choose the pathway which will satisfy both your financial needs and your own interests and hobbies, family and relationships.

3. When will I be eligible for the Age Pension?

If eligible, you’ll be able to apply for the Age Pension at age 66 years (or 67 years by July 1, 2023).

Applying for the Age Pension can be difficult. Our comprehensive guide will help make the process smoother.

When should I retire? Contact us anytime to get the conversation started:

4. When do most people retire?

Once you’ve reached preservation age, it’s up to you when to retire. In Australia, the average age of retirement is between 66 and 70. By this age, many people have built up a healthy financial reserve and are still young and healthy enough to enjoy ticking some items off their bucket list during retirement.

Take a look at our full guide for more information on retirement and preservation age.

5. Can I retire early?

If your nest egg is ready, then yes you can! If you have enough money to support the retirement you want and need then it’s entirely up to you when you retire (once your preservation age has passed).

Have a look at this article from our blog for more information on working out how much money you need to retire comfortably, and how to figure out if you’ll have enough.

Something to consider:

Catch-up contributions:

Also known as Carry Forward Contributions, catch-up contributions are made to retirement accounts and are a great way for people to help their nest egg grow more quickly.

6. How’s my Super performing? Will I have enough?

We get asked this question all the time. And the answer is, it depends! The first thing you need to do is contact your Super fund to find out how your Super is performing. If you’re concerned, we can help. Contact us anytime to discuss your options.

Everyone has different requirements in retirement, so the best thing to do is work out what you’ll want and need in retirement and go from there. Here is our blog that will help with working out whether you’ll have enough Super to retire when you want to.

When should I retire? Contact us anytime to get the conversation started:

7. Should I boost my Super?

Many people believe they need $1M+ to retire – but this isn’t always the case. Find out how much Super you need to retire, by reading our blog.

Once you know how much Super you’ll need to retire, we’ll help you create a plan to help you get there!

8. What kind of retirement lifestyle do I want to have?

Wondering what you might like to plan to do in retirement? Here’s a post we created to get you inspired!

9. How healthy am I?

Your health – good or bad – has an impact on when you can and should retire. If your health is having a negative impact on your ability to work, you may choose to retire earlier.

These days we’re living longer in retirement – which is great news of course! But it does mean that we need to ensure our finances will last for the long haul. Ensure you’re ready to live longer in retirement with our quick video.

10. How are my savings and investments going?

Your retirement income system relies on three things: compulsory employer-paid Super, the Age Pension and private savings inside and outside Super. Many consider home ownership as the fourth pillar.

11. What are the benefits of retiring later in life?

Some people choose to retire after age 70, which is considered as late retirement.

If you enjoy your work and want to continue in your career, you don’t need me to tell you the advantages of retiring later! Nevertheless, here’s a quick rundown of some of the advantages of late retirement that you may want to consider:

Job satisfaction

If you love what you do, why not keep doing it for as long as you can! Once you reach preservation age, you’re able to access your Superannuation anyway, whether you choose to use it or not.

More time to save

Having more time to add to your savings is never a bad thing! This means you’ll have more money to enjoy doing the other things you enjoy once you’ve retired.

More time to plan

Dreaming of travelling the world? A later retirement not only allows you to save more money but also take your time in making plans, ensuring everything is ready to go once you retire.

The best way to get a good idea of how your savings and investments are going is to speak to your financial planner who will be able to explain everything to you and give you an idea of where everything is heading in the near- and long-term future.

Deciding the best age to retire is a big decision, with many factors to consider. Hopefully this guide has helped start the decision-making process and of course, if you need to discuss anything, we are here to help! Contact us anytime to book a chat.

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Micheal is a financial expert with over a decade of experience in the field. Growing up in countryside Victoria, and later moving to Melbourne to pursue higher education, Micheal has since then been working in the financial industry for over 13 years with much of his career spent as a financial advisor. He holds the prestigious Certified Financial Planner designation and is a registered member of the Financial Planning Association of Australia. Micheal is also a dedicated family man and proud father of 3 amazing children. When he isn’t working or spending time with his family, he enjoys outdoor activities such as hiking and camping.

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