When can you retire? The age pension and super in retirement 101
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
You could retire tomorrow. You read that right. But before you hand in that resignation letter and bid farewell to the daily grind, there's a crucial question to answer: how will you fund your post-retirement lifestyle? Maybe you need to work a little longer (sorry).
Transitioning into retirement isn't just about setting a date; it's about strategic planning. Whether you're a young professional or nearing retirement age, understanding the ins and outs of this process is essential. You're already contributing to your superannuation, but what happens when it's time to start reaping the benefits?
A lot of people believe you just pick a day to stop working, quit your job, have a farewell party, call you super fund, and wait for your super money to drop into your bank account. Wrong! You can plan to retire from the workforce early, or slowly wind down your number of working days as you get older. There is no one way to retire, but you do need your own plan.
Contrary to popular belief there is also no ‘retirement age’. But the older you are the more options there are available to you around choosing to slow down or stop working, and whether you can start accessing your superannuation and/or the age pension through Centrelink to support your retirement.
There are some key ages you need to know though – ‘preservation age’ and the age you can apply for the age pension.
Preservation age is age 60 (for most people reading this – these ages are increasing) and this is when the door to superannuation begins to open. You can access 100% of your superannuation after the preservation age of 60 if you have retired from the workforce. You can access 10% of your balance if you are still working as a transition-to-retirement pension.
In regards to accessing the age pension through Centrelink you need to reach the age of 67 (for most people reading this – again, these ages are increasing over time). There are also guidelines around if and how much of the age pension you receive. Centrelink carries out its own assessment of your situation, with an income and assets test, and depending on your situation you might be able to access a part or full pension.
So within all this you could be accessing bits and pieces of multiple options. You might be able to access both your superannuation pension AND the age pension from Centrelink simultaneously. Or you might still be working a few days a week and accessing your super to cover the gap of your expenses. It really needs to be tailored to you. See now why we think about retirement plans?
But I do want to highlight one thing – the age pension is fairly modest in terms of how much you get. At the time of writing and without taking your specific situation into account, the normal maximum base rate of the age pension for a single individual is $1,047.10 per fortnight; the equivalent for a couple is $1,578.60 per fortnight (Services Australia, obtained 29/01/25). The rates really aren’t high, and I hope that with some preparation and superannuation focus you can supplement these amounts and enjoy the lifestyle you want in retirement.
If you want to learn more about this topic, check out the episode on Retire Right: ‘the age pension and super in retirement 101’ (Spotify | Apple Podcasts).
If you’re under 50, I hope this comes as a reminder to prioritise your superannuation. We talk about ‘future you’ all the time, and ‘future you’ will need superannuation and/or the age pension to assist in the transition out of work and older life. If you’re over 50 I hope this helps you understand a little more about how you can make steps forward as you get closer to retirement. If you haven’t already I’d encourage you to subscribe to the Retire Right podcast – which you can do here.
I hope this also demonstrates why a financial adviser could be useful as a third party to help plan this kind of transition. In all honesty I’d encourage everyone to consider seeking the support of a financial adviser as they get closer to retirement – there’s a lot of layers to it and an adviser knows how these layers can work together. You always make the final decision, but an adviser can help put all options on the table in a clear and easy to understand way, so you make an informed decision.
