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Australian workers intend to enter retirement at an average age of 65.6 years, but multiple factors may prompt them to do so earlier.
This is borne out in the latest Retirement and Retirement Intentions survey released by the Australian Bureau of Statistics (ABS).
The data shows the average age at which Australia’s 4.5 million current retirees ceased their employment was 57.3 years.
The survey found the top factor influencing the decision to retire in FY25 was financial security.
For the majority of workers, financial security means reaching their superannuation preservation age or the pension age.
This enables them to access savings locked away for decades in superannuation, and/or receive income support from the government.
The ABS said 156,000 Australians decided to retire in FY25.
Gaining full or partial access to superannuation from age 60 (or earlier, depending on year of birth) or becoming eligible for the pension was the top reason to retire for 33% of those workers, according to the data. The average age of those workers was 64.5 years.
Unexpected circumstances account for the next four most common reasons to retire.
In each case, these unforeseen life events meant retiring earlier than planned.
The survey found that in FY25, 13% of retirees ceased their last job due to sickness, injury, or disability at an average age of 56.9 years.
Just over 6% retired due to being retrenched, dismissed, or unable to find work, at an average age of 58.3 years.
Another 6% left or lost their jobs for other reasons, at an average age of 59.6 years.
Just over 3% retired to care for an ill, disabled, or elderly person, at an average age of 59 years.
When can you access your superannuation?
Australians who retire at or after their superannuation preservation age can gain full access to their super savings.
Workers who don’t want to retire at preservation age can have partial access to their super via a transition-to-retirement (TTR) income stream. The TTR is especially helpful for workers who want to switch to part-time employment as they get older.
Hamish Landreth, Director of Financial Services at Prosperity Advisers Group, said the TTR is a popular strategy among his clients today.
Landreth told The Fool:
Despite still working, many people will access their superannuation to help supplement a reduction in income or fund other lump sum costs or financial strategies as they start to prepare for retirement, if they eligible to do so.
When can you access the age pension?
Australians become eligible for the age pension between 65 and 67 years of age, depending on their date of birth.
For those born on or after 1 January 1957, the pension age is 67 years.
The full pension payment is $1,178.70 per fortnight for singles and $1,777 per fortnight for couples.
The pension is means-tested and involves an asset test and income test.