At our Brisbane financial planner firm, one of the most rewarding aspects of our role is to help clients to achieve their retirement goals. This may include retiring two, five or maybe even ten years early. If you are looking at receiving the Aged Pension (subject to eligibility criteria) from aged 67 (or 66 years and 6 months for those born prior to 1 January 1957) you will need to be able to fund your own annual income needs from superannuation or personal investments between when you retire and when you become eligible for the aged pension.
To access your superannuation prior to age 67 (or 66 years and 6 months for those born prior to 1 January 1957) you will need to have reached your preservation age. Your preservation age is the age you can access your super if you are retired (or start a transition to retirement income stream).
Preservation age based on date of birth
| 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 |
If you wish to retire prior to reaching your preservation age, you will need to fund your annual income needs through your investments.
How much money do I for my Annual Income Needs?
According to the Association of Superannuation Funds of Australia Limited (ASFA), to enjoy a comfortable retirement for a couple that owns their own home will require an annual income of $65,000 (as at December 2021). This amount will allow retirees to maintain a good standard of living by accounting for daily essentials including groceries, transport, and home repairs, along with private health insurance. It also allows for access to exercise and leisure activities and the ability to dine out from time to time. Perhaps most importantly it makes provision for retirees to remain connected with family and friends virtually (with the aid of technology) and in person, with an annual domestic trip and an international trip every seven years.
At Fleming Financial Planning, we have some clients that struggle to spend around $40,000 (modest lifestyle – just above aged pension level) per annum, while others spend well in excess of $100,000 per annum. The benefit of working with one of our Brisbane financial planners is that as part of our expert advice on superannuation and retirement planning, is that we assist you to create a realistic and thorough estimate of your annual income needs.
We work with you to build your assets during the accumulation phase (prior to retirement), and model your income needs after retirement so that we can provide accurate advice on when you can afford to retire without the stress of “running out”.
Source: https://www.superannuation.asn.au