It’s never too early to start planning to help ensure you have enough savings to enjoy retirement – and the longer you have your money in super, the more it’s likely to grow.
Deciding at what age to retire
Deciding when to retire is one of the most important decisions of both your personal and working life. Although there is no mandatory retirement age, according to the Australian Bureau of Statistics, the average retirement age is 55.4 years, with women on average retiring sooner than men.
Deciding when to retire largely depends on the age when you can access your super. In addition, depending on your circumstances, you may also want to consider at what age you could potentially qualify for the government age pension, a benefit paid to eligible Australians by the government to help them in retirement.
Accessing your super
You can access your super when you meet a condition of release, the most common being ‘preservation age’ – this is currently 60 years of age.
Accessing the government age pension
The age in which you can qualify for the government age pension is also dependent on when you were born. The qualifying age currently ranges between ages 66 and 67.
The government age pension also has a number of other eligibility criteria which you will need to meet prior to receiving it. For general information on the government age pension, please see the Services Australia website.
Determining how much money you need to retire
Everyone is different and how much money you need to retire depends on your personal circumstances, and the type of retirement you’d like to live.
To help you understand what your retirement could look like, the Mercer Financial Advice team have developed a Retirement Calculator. This calculator can help you estimate how much you might need depending on the lifestyle you’d like to enjoy, income you might receive in retirement and how long it might last.
Allocated pension vs. Transition to retirement
Depending on where you are on your retirement journey, and if you’ve reached your preservation age, there are two types of retirement phase accounts that Mercer Super can offer – both within the Mercer SmartRetirement Income product:
Allocated Pension
For members who are ready to, or are already retired, and want to receive a regular income, whilst keeping their super funds invested and earning money.
Transition to retirement
For members who aren’t ready to retire but want to reduce their working hours, a transition to retirement pension can draw from your super to supplement your income in a tax-effective way
The first step on your retirement journey
When planning for retirement there is a lot to consider, but with the right advice it doesn’t need to be difficult or confusing. If you are considering retiring, or looking to plan for the future, we recommend seeking financial advice. As part of your membership, our Helpline Advice team can provide financial advice about your super fund at no additional cost.
Disclaimer: Issued by Mercer Superannuation (Australia) Limited ABN 79 004 717 533, Australian Financial Services Licence # 235906, the trustee of the Mercer Super Trust ABN 19 905 422 981 ('Mercer Super'). Any advice provided is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any advice, please consider the Product Disclosure Statement available at mercersuper.com.au. The product Target Market Determination can be found at mercersuper.com.au/tmd.
The material contained in this document is based on information received in good faith from sources within the market and on our understanding of legislation which we believe to be accurate. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy.
This information is based on the interpretation of current tax laws which may change. You should obtain your own tax advice.
Mercer financial advisers are authorised representatives of Mercer Financial Advice (Australia) Pty Ltd ABN 76 153 168 293, Australian Financial Services Licence #411766. The value of an investment in the Mercer Super Trust may rise and fall from time to time.
The investment performance, earnings or return of capital invested are not guaranteed. Past performance is not a reliable indicator of future performance. 'MERCER’ is an Australian registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.