Australian retirement age is pretty flexible. However, many people choose the route of retirement when they’re ready. Australian retirement age also depends on the financial conditions of an individual. If someone thinks they have enough for retiring, then that could be the age of retirement.
However, according to the Australian government, the pension age is 66 years, which means, if you retire, you’re eligible of receiving pension.
If you have a super dedicated for your retirement, you can choose to utilize that throughout your retirement phase. Again age pension is also a source of retirement income.
A lot of people choose to retire because of their declining health conditions. In such case, you need to have an idea of whether or not you can access your super at the particular time of retirement.
When do average Australians retire?
For most people, the average retirement age in Australia is between 45 years to 55 years. If you narrow it down to people who’ve retired in the past five years, it will increase to 62 years to 65 years. All of it depends on how much you’ve saved for a consistent retirement income.
If you plan your retirement early, chances are, you’ll have a settled financial future. A financial career that comes with planning leads to the best financial decisions and output. Hence, people who start early tend to retire within 55 years of age. On the other hand, if an individual begins planning their retirement a bit late, chances are, their retirement age will end up being above 60 years of age.
Australian retirement age and planning
When you think about the possible outcomes of a certain age, the first thing that pops up on your mind is the retirement plan. It is imperative to prepare oneself financially and emotionally when moving towards retirement planning. When planning for retirement, it would help if you get the idea about what type of income you can access in retirement. Some of the sources of income are mentioned below:
- Super Savings: super savings are one of the income sources after you’ve retired. The primary job of a super account is to support you during your retirement time, hence having healthy funds saved in your super account is a must-have.
A certain amount of money is paid by your employer, which goes to your super account. The super account can only be accessed when you’re eligible, I.e. when you retire.
- Government age pensions: The age pension is provided by the government who needs assistance. This applies for the senior citizens who have just recently retired and are 65 years old or above. The Australian age pension also encourages pensioners to increase their incomes in any way they can. The age pension provides full support for meeting the residency requirements. How much you can get from the age pension fund depends solely on the rates and the status of your financial condition. An income asset test is used to analyze how much you can get from the government-funded income sources.
- Investment: making smart investment choices aren’t too hard if you have a financial planner. If you construct a return portfolio which has stock and bond funds, it could help you to analyze where and what to invest in. buying bonds can help you to earn interest with the matured principal. Hence, investing in bonds can be an excellent source of income after retirement. Another investment is rental estate which is a stable source of income. Furthermore, dividend and dividend funds can help to build a steady source of retirement plan. When companies increase their dividend payouts, you’re likely to get the benefit as well.
Australian retirement age and your ability to work:
Health is a significant factor when planning for any life decisions, especially financial decisions. Your health plays a crucial role in permitting you to work. Employment ability decreases as you grow. Your ability to work can affect your retirement planning, starting from funding your super to investments and insurance.
Hence, it will be much helpful if you start planning for your retirement age early. We do not always have the idea of what health situation we’ll have to face in the future. Keeping emergency funds for your retirement age can help a lot as well.
Retirement age and recreational activities:
There’s no doubt that you’d want to live a comfortable life after you retire. By the time you reach your retirement age, you’d like to explore as much of the energy left to live. Australians are reported to living longer and active lives. In such a case, you’d want to set aside a minimum fund for recreational activities.
You may have hobbies that you want to hold on to until the day you live. You may wish to travel to a country you’ve always wanted to explore. To make sure you’ve checked through your bucket list, it’d be beneficial to save and set aside a particular amount for recreational activities. Activities such as gardening and other leisure activities can be funded through your super.
Financial planning for retirement age:
Above and beyond everything, the essential tool for your retirement age is nothing but financial planning. Financial planning will help you figure out how much you need to retire.
Financial plans also help you to build a budget to allocate your expenses as per necessity. Budgeting for daily expenses to retirement funds will get your stress off from all the financial worries.
You have to set a specific goal for the lifestyle you want to have. Start with cutting off unnecessary expenses.
Budgeting is the right way to put your financial goals. Saving is one of the most prominent strategies to stay on track for retirement planning. Again, if you want to save for your future, it’s better to start early.
If you figure out alternative ways of making money, that could work on your favour as well. Furthermore, you can take off most burdens from your shoulder if you pay off your debts and mortgage bills.
Factors to consider while making a financial plan:
- Know where you stand, are you independent and the only individual to contribute to your family? Does your partner equally contribute for the expenses? Knowing your financial stand can give you an excellent reason to start.
- Know your debts and how much you owe to what source.
- See if you have signed up for insurances. If not, consider making one.
- Look out for the expectations you hold from your retirement life.
When you’ve enough knowledge about the Australian retirement age, you’d be able to focus on your work today and make money for tomorrow.