Australians commonly look to retire in their 60s. But what if you don’t plan on waiting until then? How much super would you need to retire at 55, for instance?

How Much Super Do I Need to Retire at 55?

The amount of super you would need to retire at 55 is $900,000 for a single person and $1,175,000, combined, for a couple.

This assumes that you are targeting a comfortable retirement income of $51,000 p.a. for individuals and $72,000 p.a. for a couple and that you would like to cover expenses until age 100.

It also assumes an average investment return of 6.5% p.a. and inflation of 3% p.a.

But there’s a catch.

You generally can’t access your super until age 60.

So really, the question we need to ask is how much money do you need outside of super to get you through from age 55 to 60? And then, how much super do you need to cover expenses from then on, throughout retirement?

But first, are you even allowed to retire at 55 in Australia?

Can I Retire at 55 in Australia?

You can retire at 55 in Australia. In fact, there are no rules against an early retirement at any age in Australia.

In saying that, you are generally unable to access your superannuation until you attain age 60 (your superannuation preservation age dictates when you are first able to access your super).

Therefore, you will need to ensure you have adequate funds outside of superannuation to fund your retirement between the ages of 55 and 60.

Can I Access My Super at 55?

There was a time when you were able to access your super at 55, but this is no longer the case.

An update in superannuation regulations progressively changed the superannuation preservation age from 55 to 60, based on your month and year of birth, as follows:

Now that you know when you can access your super, what do you need to do to retire at 55?

What Do I Need to Do to Retire at 55?

In order to retire at 55, you need to figure out how much you should have outside of super to get you through from age 55 to 60.

For instance, a single person would need $250,000 in non-super investments to cover expenses of $51,000 p.a. from 55 to 60 and then a further $650,000 in super to cover those expenses from age 60 to age 100.

A couple would need $325,000 in non-super investments to cover expenses of $72,000 p.a. from 55 to 60 and then a further $850,000 (combined) in super to cover those expenses from age 60 to age 100.

Related Article: How Much Super Do I Need to Retire?

Risks of Retiring at 55 in Australia

The risk of retiring at 55 include:

• Non-Access to Super: You will not have access to super at 55, meaning you will be solely reliant on personal investments to fund your retirement lifestyle for 5 years, until age 60. If your non-super funds are exhausted prior to this, you may need to return to work.

• Shorter Accumulation Period: By retiring early you are reducing the number of years that you have employer super contributions (or personal contributions) being made into your super account, which compounded over time can significantly increase how long your money will last in retirement.

• Longer Funding Required: Retiring earlier means you have more years that you need your retirement savings to last. Therefore, you will need to settle for a lower retirement income objective or be comfortable that your super and investments will run out sooner.

• Centrelink – Age 55 is 12 years away from the Age Pension age of 67. This increases the number of years that you will be relying solely on your own super and investments before having your income supplemented by the Age Pension – thereby depleting your savings quicker.

While there are a number of risks with retiring at 55, the benefit is that you get to enjoy more years doing what you want to do. Are you willing to sacrifice a higher retirement income for more retirement years?

If you can do it, why not? In fact, you may not need to sacrifice all that much if you plan correctly.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

Frequently Asked Questions

Here are some frequently asked questions around how much super you need to retire at 55.

Is $1,000,000 Enough to Retire at 55?

Yes, $1,000,000 is enough to retire at age 55 if you are a couple wanting a retirement income of $68,000 p.a. or a single person wanting a retirement income of $59,000 p.a. This is based on an investment return of 6.5% p.a., inflation of 3% p.a. and the assumption that you are a homeowner for Centrelink purposes.

Can I Retire at 55 in Australia

You can retire at 55 in Australia. There is no rule that stops you from retiring at whatever age you please. However, you generally cannot access your super until age 60.

Can I Retire at 55 with 500k?

You can retire at age 55 with $500,000 if you are a couple wanting a retirement income of $45,000 p.a. or a single person wanting a retirement income of $37,000 p.a. This is based on an investment return of 6.5% p.a., inflation of 3% p.a. and the assumption that you are a homeowner for Centrelink purposes.

How Much Super Should You Have at 55?

The average super balance for a 55 year old in Australia is approximately $280,000 for a male and $210,000 for a female. However, the amount of super you should have at 55 is based on your personal circumstances and your objectives between now and throughout retirement.

Do I Get Centrelink Over 55?

You are eligible to get Centrelink Age Pension payments from age 67, provided you are under the Income Test and Assets Test. However, you may be eligible for other Centrelink payments such as a Disability Pension or Carer’s Pension, sooner.

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