From those Monday mornings when getting out of bed is a struggle to the days when 3.30itis hits particularly hard, many of us spend years looking forward to retirement.

But when it gets to crunch time, it can be hard to figure out the right time to say goodbye to a decades-long career and prepare yourself both financially and emotionally for the change.

After all, while 65 has long been seen as the typical milestone at which to retire, Australia doesn’t actually have a set retirement age. For many, the choice lies with us – and there’s a lot to think about when making your decision about when to retire.

Here are a couple of factors you may want to think about as you start to plan:

Your age

While there’s no official retirement age, there are a few different age-based milestones that are worth considering when you start planning for retirement.

Your preservation age

Perhaps the most important date to keep in mind when it comes to super and retirement is your preservation age, or how old you must be before you’re actually able to access your super. Basically, if your super is key to your retirement, then unfortunately there’s not much point on picturing yourself retired at 35.

Your preservation will depend on the year you were born:

When you were bornPreservation age
Before 1 July 196055
1 July 1960 - 30 June 196156
1 July 1961 - 30 June 196257
1 July 1962 - 30 June 196358
1 July 1963 - 30 June 196459
After 30 June 196460

However, your preservation age is not in itself a ‘condition of release’ (a criteria you must satisfy in order to access your super). After reaching this milestone, you must meet either retire, or semi-retire by opening an income account as a transition to retirement member, in order to access your super.

It’s also important to note that you will pay tax on the amounts you withdraw if your preservation age is earlier than 60 and you choose to start tapping into your super before 60.

Age 60

Everyone can choose to access their super at age 60, as this is the last box in the preservation age table.

You can tap into your super while you’re still working with an income account as a transition to retirement member, or if you’re ready to retire, you can access your super either as a lump sum or as an income stream from an income account as a retirement member.

At 60, you can make withdrawals without paying any tax. Investment earnings in an income account are also tax-free for retirement members.

Age 65

While it’s not a mandated retirement age, per se, turning 65 is the ultimate condition of release when it comes to using your super: at age 65 you can actually tap into your super while continuing to work, should you choose to.

Your pension age

While a range of other eligibility criteria apply, such as the assets test, the first and foremost requirement for accessing the Age Pension is just that – your age.

Like your preservation age, this depends on the year you were born. For the Age Pension, it’s called your qualifying age.

If you were born...Your qualifying age is
Before 1 July 195265
From 1 July 1952 to 31 December 195365.5
From 1 January 1954 to 30 June 195566
From 1 July 1955 to 31 December 195666.5
On, or after 1 January 195767

If part of your retirement plan includes the Age Pension, it may be worth considering your qualifying age.

The emotional side of retirement

While we spend years – if not decades – looking forward to it, the day-to-day reality of retirement can be emotional at first.

After all, it’s not only a physical change in terms of going from a workplace to being able to sleep in and stay home each day.

It also means saying goodbye to everything that a job means. It’s a career and identity you spent decades building, a workplace that may have come to feel like your second home, and colleagues that you see more than your own family.

So as you think about your retirement plan, it’s important to think about how you’ll find a similar sense of meaning and fulfilment in your life after work.

You could start by thinking about the aspects of your work you enjoy more than others or those that you think you might miss more than others when you retire.

If you want to ease into retirement rather than going off work cold turkey, Transition to Retirement could be a viable option to explore.

If you have reached your preservation age, a TTR strategy can allow you to cut back on working hours while tapping into your super.

How much super do you need to enjoy the lifestyle you want in retirement and what do you need to get there?

There’s no magic number when it comes to how much money you’ll need to retire. While the $1 million figure often comes up, rest assured there’s no official government decree that says the magic million is a must.

Like many other aspects of super, it all depends on you and your personal circumstances – in particular, what kind of lifestyle do you personally want to live in retirement? In other words, what does your super actually have to be able to pay for?

As a rough guide, the Association of Super Funds of Australia (ASFA)’s Retirement Standard estimates that a couple will need a lump sum of $640,000 in combined super savings at retirement in order to enjoy a ‘comfortable’ retirement. A single person, meanwhile, will need a lump sum of $545,000 in super savings.

A ‘modest’ lifestyle will require a lump sum of $70,000 in super savings at retirement.

Watch this short video to learn how to start planning for how much you need in retirement:

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