What is the retirement age for someone born in 1966?
The retirement age for someone born in 1966 in Australia depends on whether you are referring to your superannuation retirement age, or when you can collect social security.
This article explores superannuation and social security retirement ages for people born in 1966.
It also explains the different superannuation retirement rules, depending on your age and employment status, as well as working after retirement rules.
The retirement age for women born in 1966 is the same as it is for men.
Born in 1966 When Can I Retire?
The retirement age for someone born in 1966 for superannuation purposes starts with your superannuation preservation age.
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Your preservation age is the earliest that you are able to access your superannuation in some form or another.
The superannuation preservation ages for each year are as follows:
| Date of Birth | Preservation Age |
|---|---|
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| From 1 July 1964 | 60 |
You can use this calculator to determine your preservation age.
It is important to understand that, just because you have reached your superannuation preservation age, you do not necessarily have full access to your super.
You also need to take into account your employment status to determine your full retirement age.
Born in 1966 Accessing Superannuation
Based on the table and calculator above, you can see that the superannuation preservation age for someone born in 1966 is age 60.
What does superannuation preservation age mean?
Once you have met your preservation age, you are able to access your superannuation via a non-commutable account based pension, even if you are still working.
A non-commutable account based pension is commonly referred to as a transition to retirement pension, or TTR pension.
Accessing Superannuation – Still Working
You can use some or all of your superannuation accumulation balance to start a TTR pension.
A TTR pension provides you with an income of between 4% and 10% of your TTR pension balance each financial year.
You can decide how much you receive, provided it is between the 4% and 10% thresholds.
The 4% and 10% is calculated on your TTR pension balance on 1 July of each year.
If you start a TTR pension part way through a year, the 4% is pro-rata based on the number of days remaining in the financial year.
For example, if you used $300,000 of your super balance to start a TTR pension, you would be able to draw anywhere between $12,000 and $30,000 in the first year.
This assumes that you began the TTR pension on 1 July.
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Accessing Superannuation – Not Working / Changing Jobs
If you were born in 1966 and had an employment arrangement come to an end after reaching age 60, or are retired with no intention of returning to work, you have met a full retirement condition of release.
By meeting a full retirement condition of release, you will have unrestricted access to your super savings that have accumulated up until that date.
In this case, you will have much more flexibility in the way you access your super and will not be limited to a TTR Pension.
A full retirement condition of release allows you to make uncapped lump sum withdrawals from your accumulation account.
Alternatively, you can use some or all of your super to start an ordinary account based pension (up to the Transfer Balance Cap).
However, if you return to work after ceasing an employment arrangement after age 60, any subsequent contributions are inaccessible until you meet a condition of release again.
An ordinary account based pension is similar to a TTR Pension; however there is no 10% upper threshold on the income you can nominate to receive.
The level of income you can receive is only limited by the account balance (i.e. 100%).
You must still draw an income of at least 4% though.
This minimum pension threshold increases with your age, as per the minimum pension income standards shown below:
| Age | Minimum Pension Factor |
|---|---|
| 55-64 | 4% |
| 65-74 | 5% |
| 75-79 | 6% |
| 80-84 | 7% |
| 85-89 | 9% |
| 90-94 | 11% |
| 94+ | 14% |
Accessing Superannuation Age 65
If, between ages 60 and 65, you continued to work and didn’t cease an employment arrangement, you will remain limited to a TTR Pension until age 65.
Age 65 is a full retirement condition of release in itself and therefore provides you with unrestricted access to your super for the remainder of your life, including contributions made after age 65.
Born in 1966 Collect Social Security
If you were born in 1966, when can you collect social security?
The social security pension age for people born in 1966 is 67 years.
At age 67, you are able to apply for social security payments such as the Centrelink Age Pension.
To be eligible to receive the social security Age Pension payments, you also need to meet the residency requirements.
Furthermore, social security payments are means tested, so you need to qualify under the Income Test and Assets Test assessment.
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Tax on Retirement Income & Lump Sum Withdrawals
Social Security
Generally, social security payments, such as the Age Pension, are fully taxable at your individual tax rate.
Your Age Pension payments are combined will all other sources of assessable income and taxed at your marginal tax rate.
Superannuation
Generally, all superannuation lump sum withdrawals and pension income are received tax free for individuals over age 60.
Pension income is taxed the same whether it is from a TTR Pension or Account Based Pension.
Aside from there being no upper income threshold on an account based pension, the main difference between transition to retirement pensions and account based pensions is the tax on earnings.
All earnings received from investments within a TTR Pension account are taxed at up to 15%; whereas earnings within an account based pension are received completely tax free.
The only time tax will be payable on lump sum super withdrawals or pension income is when part of your pension balance includes a taxable (untaxed) element.
You can contact your superannuation provider to see if your balance includes a taxable (untaxed) element and then refer to this article to see tax that would be payable.
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Retirement Age Calculator
Being born in 1966 and understanding when you can retire can be confusing.
The social security retirement age is straight forward; however, when and how you can access your super depends on your employment status.
In order to help you understand your retirement age if you were born in 1966, I have created the calculator below.
This can show you the different types of retirement ages and ways to access your super.
Feel free to comment below or ask questions about What is the retirement age for someone born in 1966?
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