For most, the age we choose to retire comes down to the state of our health, our financial commitments and our ability to fund our retirement years and future plans. Other influencing factors include the age we’re able to access our super and the Government’s Aged pension (if this is something you qualify for) to help with living costs.
What is the preservation age?
In Australia, the preservation age is the age at which you are allowed to access your superannuation if you retire or have set up a transition to retirement income stream.
The preservation age will be different from individual to individual based on when they were born. Here are the various preservation ages at time of writing.
|Date of birth||Preservation age
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|After 30 June 1964||60|
However, reaching your preservation age isn’t a guarantee that you’ll be able to access your super benefits; superannuation has several ‘conditions of release’, at least one of which must be satisfied in order to access super benefits. The more commonplace conditions of release are:
- Reaching your preservation age and retiring
- Reaching your preservation age and beginning a transition to retirement
- Ceasing an employment arrangement after turning 60 (however you may continue with a different employment arrangement, as outlined here)
- Turning 65, regardless of employment status
So while you may have reached your preservation age, you won’t necessarily be able to access your superannuation – unless you find yourself in exceptional circumstances such as financial hardship, incapacity, or a terminal medical condition.
The following table contains details of the superannuation funds rated by Canstar. This table has been sorted by one-year performance (highest to lowest).
Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
Canstar considers the annual investment returns of a product’s default investment option, including default life-stage options. Where a product does not have a default investment option, annual returns for the investment option with the highest FUM and a 60-80% growth asset allocation are used.
Additionally, in many cases an individual’s superannuation will not be enough to support them through the entirety of their retirement, so they may require the Age Pension – but the age requirements for the Age Pension are entirely different.
How old do I have to be to be eligible for the Age Pension?
As with your preservation age, the age at which you become eligible for the Age Pension will depend on when you were born – there are also a number of other factors that could impact your eligibility age. The various eligibility ages are:
|When you were born||Age pension eligibility|
|1 July 1952 to 31 December 1953||65 years and six months|
|1 January 1954 to 30 June 1955||66 years|
|1 July 1955 to 31 December 1956||66 years and six months|
|From 1 January 1957||67|
Source: Department of Human Services
Age isn’t the only eligibility factor though – when applying you will have to satisfy various citizenship, residence, income and asset ownership requirements in order to qualify.
Remember, accessing the Age Pension could have tax implications and could impact government entitlements you may be eligible for, so it is important to do your research.
Comparing the table of preservation ages found earlier in this article against the table of Age Pension eligibility ages above shows the difference between the two can range from just under to just over a decade, meaning if you do choose to retire at preservation age your superannuation may have to last you up to 12 years before you can supplement it with the Age Pension.
Making the time now to prepare for your retirement is a wise move and one important way you can do that is to do your homework to find the best superannuation fund for your circumstances. This can help you make the most of your investment and ensure you retire with as much super as possible. You can compare different super funds with Canstar.