In Australia, age 60 to 65 is the most popular timeframe for retirement. From age 60, you can generally access your superannuation once you stop work, or meet another condition of release. By age 65, you can access your super regardless of whether you're still working.
But what if you don't want to wait that long?
The good news is, you don't need to.
Provided you have enough money to fund the retirement lifestyle you want, you can actually retire whenever you like.
Let's investigate what retiring at age 57 might look like, and how much it might cost.
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What is a 'comfortable' retirement?
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 a basic retirement or 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 does it cost to retire comfortably?
ASFA calculates that a comfortable retirement will cost roughly $55,923 per year for single Australians. It's expected to cost a couple living together closer to $78,566 per year combined.
How much do I need in my superannuation to finance that?
In order to have enough money for a comfortable retirement, ASFA calculates that at age 67, single Australians should have around $630,000 in their superannuation. Meanwhile, couples will need a balance closer to $730,000.
But the only 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 that you own your home in full.
Which means if you want to retire much earlier, at age 57, then you'll need additional savings to support yourself for the three years before you reach your preservation and can start drawing down on your super balance.
So, how much do I need at age 57 to be able to retire early?
First, you'll need to ensure you can support yourself from age 57 to age 60.
Using the figures above, that means individual Aussies will need around $167,769 set aside. This will need to be separate from your superannuation (otherwise you won't be able to access it), in a type of accessible savings account.
Couples will need around $235,698 of savings in order to fund those three additional years.
On top of that, you'll need to make sure you have enough in your superannuation to support yourself from age 60.
That means ASFA's $630,000 or $730,000 guide isn't going to be enough. You'll need to fund an additional seven years of retirement between ages 60 and 67.
So, 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.
If you don't own your home outright, you'll also need to consider how you'll pay your mortgage or rent.
