Average teacher retirement age in Australia

According to the Australian Bureau of Statistics, in 2022–23 the average retirement age for someone working in the education and training sector is 65 years.¹

Whether you’re early in your teaching career, or getting close to retirement, it’s important to plan ahead. It’s especially important if you want to retire before you are eligible for the age pension, which for most teachers currently teaching will be after the age of 67.

When can a teacher retire in Australia?

In Australia, there is no compulsory retirement age for teachers. When you retire, it is up to you and will depend very much on your personal circumstances. It’s important to note, however, that you can only access your super when you reach your preservation age, which for anyone born after 1 July 1964 is 60. And if you were born on or after 1 January 1957, you are not eligible for the age pension until you turn 67.²

So, if you’re thinking about the possibility of retiring earlier, you’ll need to plan how to fund those early years of retirement when you won’t meet the age minimums for receiving ‘retirement benefits’ in the form of super and the age pension. For low-cost financial advice, you can talk to an NGS Financial Planner.

What happens after retirement?

In Australia, most people’s retirement income comes from a combination of superannuation and the age pension, and some may also have other investment income.

To receive income from your super and to qualify for the age pension, you must meet certain criteria.

Super

To receive your super when you retire, you need to meet a condition of release. Conditions of release include:

• retiring at or after your preservation age (age 60 for everyone born after 30 June 1964)
• ceasing an employment arrangement on or after age 60
• reaching 65 years of age (regardless of your working status).

Your options for accessing your super are explained below.

Age pension

To qualify for the age pension, you must have:

• reached the minimum pension age³
• been an Australian resident for at least 10 years⁴
• met the income test and
• met the assets test.

You can find out more about the age pension here and here.

You may have heard of a ‘teachers’ pension’ or ‘pension schemes’ for teachers, but these are references to overseas systems, such as the Teachers’ Pension Scheme in the United Kingdom, which is a defined benefit scheme. There is no such scheme in Australia, although in the past, some teachers were entitled to defined benefits.

Accessing your super after retirement

Once you have retired and met a condition of release for your super, you can choose how you receive it. At NGS you can either:

• access your super via income payments with an NGS Income account
• receive it as a cash lump sum or
• combine the 2 options by taking part of your super as a lump sum and putting the rest into an NGS Income account.

Opening an NGS Income account

With an NGS Income account, you receive regular income payments while your super stays invested (you choose the investment option) and earning tax-free returns. How much you get, and how often, is up to you, although you do need to receive the legislated minimum. You can change your income payment amounts to suit you. And you can also withdraw lump sums if and when you need them.

If you’re over 60, your income payments will be tax free.

You can find all the details about how to open an NGS Income account and how it works here.

Transition to retirement accounts

If you’re aged 60-64 and still working, whether part time or full time, you may want to consider a Transition to retirement (TTR) account. The income payments from a TTR account can help supplement your reduced salary if you move to part-time work, while if you continue to work full time, a TTR account can provide more cashflow which in turn may allow you to make additional concessional contributions to super and save tax.

Tax-free super payments?

If you’re over 60, the payments you receive from your NGS Income account — both income stream payments and lump sums — are usually tax free. And investment earnings are always tax-free, regardless of your age. You can read more about tax and super in our Fees, costs and tax fact sheet.

Receiving the age pension

The maximum amount of age pension you could receive, depending on the income tests, is currently $1,116.30 for a single person and $1,682.80 for a couple (per fortnight). These amounts include the maximum pension supplement and the energy supplement.

The income test looks at income from all sources, including your super. Currently, to receive the full pension, a single person can receive up to $204 per fortnight from other income, while a couple can receive up to $360. To receive a part pension, a single person needs to receive less than $2,436.60 per fortnight, and a couple less than $3,725.60.⁵