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When is the best time to retire and how much will I need?

When it comes to planning for retirement, knowing when to actually take that big step into your post-work life is crucial.

In fact, it’s just as important as understanding how much money you’ll need to comfortably retire on – with the two very often intrinsically linked.

According to the Australian Bureau of Statistics, there has been a distinct trend in recent years for Australians to retire later in life than was previously the case.

In 2016-17, there were 3.6 million retirees in Australia, and the average age at retirement for this group was 55 years (almost 59 years for men and 52 years for women).

But if the lens is narrowed to Australians who retired in the past five years, the average age of retirement jumps up to 63 years, showing that people are now retiring at an older age than prior generations.

In addition, Australians are living longer, so there is a broader impact on younger generations who may require substantially more savings to fund what could well end up being a longer time spent in retirement. Recent research reveals more than half of current retirees are concerned about outliving their life savings.


Reasons to retire

There are several reasons that factor in to the decision-making process around when to retire. Generally, these involve financial status, health and wellbeing, lifestyle goals and availability of employment.

According to the ABS, for those in the workforce who were considering retirement, the most common factors influencing their retirement decision were 'financial security', 'personal health or physical abilities', and 'reaching the eligibility age for an Age (or service) Pension'.

For people who have already retired, a commonly reported reason for finishing their last full-time job was they had reached retirement age or were eligible for their superannuation and the Age Pension. Other reasons were sickness, injury or disability, being retrenched and having no work available.

Australians are living longer, so there is a broader impact on younger generations who may require substantially more savings to fund what could well end up being a longer time spent in retirement.

Factors to consider

In Australia there is no set age for when you need to retire (although there are age and income eligibility requirements for the Age Pension); however, there are a range of factors that you will need to carefully consider. Such as your assets (this includes your superannuation amount, your savings, and other investments), your health, and whether you plan to work on a part-time or casual basis when you finish full-time employment.

You will also need to take into account how much money you’ll need to support the kind of lifestyle you’d like to have. Do you want to travel? Or do you want to just kick back and maybe partake in the occasional recreational activity, like a weekly hit of tennis or round of golf?

According to the Association of Superannuation Funds of Australia, single people aged around 65 will need around $28,000 per year for a modest lifestyle and about $44,000 to lead what is considered to be a comfortable lifestyle. For couples, a modest retirement will require about $40,200 per annum and a comfortable one roughly $61,800. These budgets assume good health and that the retirees own their own home.

A modest retirement lifestyle is considered better than the Age Pension would allow, but still only covers basic activities. A comfortable retirement lifestyle allows a retiree to be involved in a wide range of activities and to  have a good standard of living. This would allow them to purchase things like private health insurance, a car, and occasional holiday travel.


Speak to a financial adviser

Having a plan and a financial roadmap is a great start but it’s also only the first step.

Getting some professional advice will give you a comprehensive guide to the best way to stay on track for your dream retirement.


About Australian Unity

Australian Unity is a health, wealth and living organisation providing products and services designed to help people thrive. More than one million Australians have created a bright future with us. Our businesses span operations providing healthcare, financial services, and retirement and living services, employing more than 7,500 people across Australia.

At Australian Unity, we make superannuation easy for you by providing a dedicated, experienced corporate superannuation account manager.


Kerryn Lancaster 
Senior Relationship Manager - Corporate Superannuation
271 Spring Street, Melbourne VIC 3000 
M: + 61 0419 449 809 

Important Information
Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, AFSL & Australian Credit Licence 234459. AUPFS is a wholly owned subsidiary of Australian Unity Limited. General Advice Warning:  The information provided is intended as a general guide for reference.  It is General Advice only and has been prepared without taking into account your objectives, financial situation, or needs.  Because of that, you should, before acting on any of the information or advice, consider its appropriateness, having regard to your objectives, financial situation, and needs.  Where it relates to the acquisition of a particular financial product, you should obtain a Product Disclosure Statement relating to that product and consider it before making any decision about whether to acquire the product.  Any comparison of superannuation funds in this document has been prepared on the funds as a whole and has not taken into account variations that may occur due to a fund member’s particular circumstances. Please refer to our Financial Services Guide.