The average age of retirement in Australia is 65. At this point, you can access your superannuation regardless of whether you've finished working or not, and you're just two years from potentially receiving the Age Pension payment.
And many government or association estimates around retirement are based on the understanding that you'll retire even later, at age 67.
But you don't have to wait that long if you don't want to.
Provided you have enough money to fund the retirement lifestyle you want, you can actually retire whenever you like.
The only catch is that you can't access your super until age 60, unless you meet early release conditions.
Let's investigate what retiring at age 58 might look like, and how exactly you could make it happen.
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What does a comfortable retirement look like?
According to the Association of Superannuation Funds of Australia (ASFA) a comfortable retirement is defined as one that enables retirees to maintain a good standard of living well beyond the age pension.
It budgets for expenses beyond a modest retirement, including top-tier private health insurance and regular leisure activities. It allocates funds for home repairs or renovations, and perhaps even an annual holiday.
How much is a comfortable retirement expected to cost each year?
According to ASFA, a comfortable retirement is expected to cost roughly $55,923 per year for single Australians. A couple living together can expect to spend around $78,566 per year combined.
How much do I need in my superannuation to fund that?
In order to fund a comfortable retirement, ASFA calculates that at age 67, single Australians will need around $630,000. Meanwhile, couples will need a superannuation balance of around $730,000.
But the catch is that these figures assume you'll be retiring at age 67. The calculation also assumes you will only need to fund around 10 years of retirement, will be eligible to receive a part Age Pension, and you own your home in full.
Which means, at age 58, you'll need a different figure, and you'll also need extra savings on the side to finance the two years before you hit preservation age.
Break it down for me. How much do I need to retire at age 58?
First, you'll need to ensure you can support yourself from age 58 to age 60. Using ASFA's figures, that means individuals will need around $112,000 set aside. This will need to be separate from your superannuation (else you won't be able to access it), in some sort of accessible savings account.
Couples would need around $157,000 of savings to fund those two years.
Then you'll need to ensure your superannuation balance is high enough. ASFA's $630,000 and $730,000 estimates aren't going to cut it because you'll need to fund an additional seven years of retirement.
But I've crunched the numbers to work out what you'll need instead.
At age 60, singles will need to have closer to $1 million in their superannuation. Meanwhile, couples will need a combined balance of around $1.3 million at age 60.
These figures assume you'll need to fund the additional seven years of retirement between the ages of 60 and 67. And that you'll be able to fund your retirement years between ages 58 and 60 out of additional separate savings.
If you don't own your home outright, you'll also need to consider how you'll pay your mortgage or rent.
