Making sense of Australia’s Retirement Age Rules

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By Jim Hennington, Fellow of the Institute of Actuaries of Australia

There is no fixed retirement age in Australia. However there two important rules that impact people’s decision making. The first is when you can access your superannuation. This is called your ‘preservation age’. The second is when you’re eligible for the government Age Pension.

Prior to July 2023, these rules are complex. However this article demonstrates that, for practical purposes, the transitional rules become irrelevant after then. This makes the rules much easier to understand.

In summary – from July 2023:

For those born after 1 July 1964 your preservation age is 60. Everyone else will have already reached their preservation age.

For those born after 1 January 1957 Age Pension eligibility age is 67. Everyone else will have already reached their Age Pension Age.

Here’s why:

Access to Superannuation

Australians can start to draw benefits from superannuation once they reach their ‘preservation age’. Your preservation age is between the ages of 55 and 60, depending on your date of birth as follows1.

  • For those born before 1 July 1960, your preservation age was 55. In July 2023 you would be age 63, so this has already been met.
  • For those born between 1 July 1960 and 30 June 1961, your preservation age was 56. In July 2023 you would be age 62-63, so this has already been met.
  • For those born between 1 July 1961 and 30 June 1962, your preservation age was 57. In July 2023 you would be age 61-62, so this has already been met.
  • For those born between 1 July 1962 and 30 June 1963, your preservation age was 58. In July 2023 you would be age 60-61, so this has already been met.
  • For those born between 1 July 1963 and 30 June 1964, your preservation age was 59. In July 2023 you would be age 59-60, so this will have been met.
  • For those born after 1 July 1964, your preservation age is 60.

Once you reach your preservation age, you can:

  • Begin a transition-to-retirement income stream from superannuation; or
  • If you’ve ceased employment or reached age 65, you can have full access to your superannuation.
Age Pension Age

The age that Australians become eligible for a government Age Pension depends on their date of birth2.

  • For those born from 1 July 1955 to 31 December 1956, the Age Pension age is 66 years and 6 months. In July 2023 you will be aged 66 ½ – age 68 so this will have been met.
  • For those born after 1 January 1957, the Age Pension age is 67.

The amount you receive each year can be reduced under means-testing rules and can be zero. You also need to meet residence rules.

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Jim Hennington - Jubilacion

Jim is a Fellow of the Institute of Actuaries who has spent his career specialising in scaled advice. Jim previously founded a boutique ex-pat retirement planning practice which grew to become an international network (UK, Canada, Australia and New Zealand). Since 2010 he has held senior software development roles for a number of financial institutions in Australia and the UK including the design of retirement decision systems for HSBC, Challenger Life and Scottish Widows. As well as being a Fellow of the Institute of Actuaries, Jim holds a Commerce degree from the University of Melbourne as well as two Diplomas in Financial Planning (UK and Australia).

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