Retiring young: Is 50 really the new 65?

Peta
The 55.7 average age of retirement, like many statistics is misleading. It was not the average age of retirement in 2018-19.
55.7 is the average age that someone last worked of all people who were retired in 2019 (and over 45). It is a measure of the 'stock' of retirees, not the 'flow' of new retirees. It actually includes some people in their 80s who 'retired' by definition in their 20s because they had to cease work on getting married (this rule applied in the public service up to 1966) and never returned to the workforce.
A better statistic on what is happening today is in table 3.1:
The average age at retirement for someone who has been retired for up to 5 years (after 2013/14) was 62.7- much closer to the expected age.
It also notes that for people who have been retired for more than 25 years was only 41.3 (189,300 men retiring at 49.7 and 574,500 women who 'retired' on average at 38.5)

What is not mentioned is the frugal living and outright home ownership of the generation before us, meaning that many people stand to inherit a valuable home and the accumulated lifetime savings of their parents and parents in law. This then determines their own retirement timing and plans. Some of us regard ourselves as mere custodians of family wealth and intend to live off it, grow it and in due course pass it on.

Some of those who retire at the stated average age of 55 may well have partners still working full time to support them, but on their own could not afford to retire.
Like my wife who has retired from paid
employment at 52

.... " a pipedream for the lucky few " , finances apart, if one enjoys job stay, take sabbatical/long service/unpaid leave, try before buy, for a year so no buyer remorse. The pipedream of retirement at any age may not be what cracked up to be. Losing structure to day can be debilitating to some once all pipedream things done & then a chore of ' what will we do today '. Haven't there been studies of seemingly fit people retiring,18mths later wham drop dead, recall stats more men than women for whatever reason. Only today heard someone back to work after year as it bored the clever, active person in mid-60's & lack of purpose.

$100k is not needed in requirement for 90% of us. Retire 5 years earlier and enjoy life. And the retirement industry never tells you whether the annual comfortable retirement income is pre or post tax. Because it's in their interest.

That's really a given as the average balance of a a retiree is not enough to fund a $100k retirement yet 1000's retire each year on less.

Lifestyle in retirement comes down to a multiple of factors, lifestyle/income prior to retirement, whether you have children or not and intend to leave them money on your passing. Whether you will use earnings and capital to finance retirement and of course how much you have when you retire.

Then there is the pension, if you have too much to get pension will you spend capital at a fast rate for a couple years from say 60 to 67 so you qualify for pension. Will you pass on the obligations to get the pension and stay fully self funded. I think genetics should be considered as well. Bar accidental deaths in family history and most of your family have lived to ripe old age, odds are you will live a long life. If you're family history is if many dying at 72 from medical/disease complications, odds are against you. I can't wait to retire at 60. I work with a guy that is 67 and has no intention of retiring, he does not need the money, however he views work as his social interaction. When it comes to retiring or not retiring, do what you feel is best for you. Embrace either opportunity, some don't get a choice. They have to keep working for whatever reason or they pass before they even get there.

Yes, I do miss the structure of work, but I wasn’t in a job I wanted to do so would I leave that employer again, absolutely, even if it meant no income, 60 years old is too old to work for a company you don’t like what they do

I'm a 53 year old female who bought their first home at 19,and had it paid off at 32. I was always saver, I was on a basic wage. I spent a lifetime reading investment books, and picking up tips where I could. I bought an investment property 10 years ago and will have that paid off shortly. I started managing my own super 3 years ago, best thing I ever did. I now work part-time and hope to retire shortly. Start saving young, be sensible with investments, and have a bit of fun along the way. The secret is - Make A Start, don't waste time putting investments off for another day.

Oodles written on likely success rate of initial capital to withdrawal rate, age, longevity, ... 'Forecasts' about the past mostly.

Estimation of the minimum retirement start to life expiration rate of return required by explicit starting and ending capital and withdrawal rate is quick and easy:

Example:

To 90 from 60, withdrawing equal to age pension, starting with $5000000 invested, expiring with Age Pension cut-off Assessable Assets (never receiving Age Pension), inflation 7.8%:

Minimum real return:
= RATE((90 - 60), (26 * 1547.6), -5000000, 954000, 0)
= -3.52% (- = continual loss)

Minimum nominal return:
= (1 + RATE((90 - 60), (26 * 1547.6), -5000000, 954000, 0)) * (1 + 7.8%) - 1
= 4.01%

Great precision is unlikely to be more accurate.

Your metre-age will vary.

Retiring early is achievable and it can be an interesting mental challenge working how to do it. When I was at school I was introduced to the "Financial Independence Retire Early concept and the principles of building wealth by a teacher in secondary school economics. Immediately the ideas appealed to me. I am now 35 and I have relentlessly pursued these goals. I invest every month , reinvest dividends and have a side hustle which I really enjoy. Already I have the financial capacity to retire 14 years before the official retirement age of 67 without relying on a govt pension . I feel happy, secure and relieved that what ever challenges my work life throws at me I can manage it with the assets that I have accumulated. Financial independence is certainly a goal worth aiming for.

Goodness, I’m average! I retired 2018-2019 aged 55. A fortunate life.

I fully retired 7 years ago aged 52.
My preservation age is 59 but I won't be accessing super until 60. My wife and I own our home in regional Vic and have lived quite comfortably since then (off investment income of around $85k pa) however this will increase by about $100k pa when we both access super income streams.
I should also add I'm a Peter Thornton devotee (even though I've never met the man) and have been invested ~90% in CBA, COH and various LICs for about 20 years (including throughout GFC and pandemic ructions). It can be done.

Rob - congratulations, and it may interest you to know that Peter T is just commencing a series of one day presentation / discussion events around Australia. 

My preservation age is 60 and I fully intend to retire then. I do fear the government will raise the preservation age before then. Going by their previous amendments to Superannuation, I don't believe it is a fear that is unwarranted.

If they do raise preservation age, hopefully they leave the current TTR for me at 60. I'll semi retired and deliver pizza 4 hours a week.

"As a broad rule, Australians can access their superannuation from 65 years old, or when they reach the preservation age – depending on the year they were born – so, our 50-year-old retiree would have to live self-funded for at least 15 years before a superannuation income stream became a reality."

At present the oldest preservation age is 60, meaning one can access their super if they "retire". So 10 years wait not 15.

Exactly - came here to say the same thing! Very strange how this fundamental fact has been quoted incorrectly!

Ditto. There's still a common misconception that super can't be accessed until the age of 65. Most of us interested in this topic are informed of the conditions of release required to cross into pension mode aged 60 (or earlier) and I'd expect financial journalists to be similarly well informed.

Same. If the article is about early retirement why suggest otherwise?

The author is aware of the preservation age aspect and mentions it. In context of their whole article he implies that it is a moot point as most people can not afford to retire at 60.
Telling the ATO you're retiring to get your Superannuation and then going back to work is not retiring.

"At present the oldest preservation age is 60"

I don't trust this current government to keep it at 60 - even grandfathered for those nearing 60.

I'm 4 2/2 years away from preservation age and having 2 avenues of early retirement using my Superannuation taking from me by legislation changes, raising of preservation age before I get there is a genuine concern.

If they leave the TTR at 60 I'll work with that though the option of fully retiring at 60 has more appeal.

I see little reason to fear an increase in the preservation age beyond 60 given how deeply unpopular it would be politically and for what gain?

What is far more likely is reduced access to the age pension through reduced indexation of income and assets test thresholds and eventually reduced indexation of the age pension itself under the guise of "data shows pensioners expenses don't increase with CPI/AWOTE and therefore age pension benefits don't need to be indexed at that rate." If people are struggling, they will be directed to use the Home Equity Access Scheme. If they don't own a home, they'll get exactly as much care from the government as they do now: none.

The previous preservation age restrictions were legislated over 20 years ago and are only now in their final year of transition.