Australia May Raise the Retirement Age: What It Could Mean for Superannuation, Lifetime Earnings, and Your Plans

Australia is weighing a significant shift to its retirement settings, framed by the Commonwealth as a lifetime gift that supports longer careers, higher cumulative earnings, and a more sustainable pension system. While many Australians are healthier and living longer, the proposal also raises important questions about fairness for people in physically demanding roles, those with long-term health conditions, and workers nearing retirement. This guide translates the proposal into plain language so you can understand potential effects on superannuation, Age Pension timing, and your personal retirement strategy.

Australia May Raise the Retirement Age Quick summary table

Why Australia is considering a higher retirement age

• Longevity and demographics: Australians are living longer. That is good news for families and communities, but it also places pressure on public finances and the Age Pension.
• Workforce and productivity: Keeping experienced workers engaged for longer can help lift productivity, transfer skills across generations, and support economic growth.
• Pension sustainability: A later eligibility age spreads public costs over more years of work and fewer years of pension payments, making the system more resilient.
• Government narrative: By describing the change as a lifetime gift, the Commonwealth signals a policy intent to link longer working lives with higher total earnings, more superannuation contributions, and potentially stronger retirement balances.

What a phased increase could look like

Although the exact design has not been legislated, a phased approach typically follows patterns like these:

• Gradual step-ups: The Age Pension age could rise by several months each year until it reaches the target (for example, 70).
• Transitional cohorts: People close to retirement get smaller increases to minimise disruption, while younger cohorts absorb the full change.
• Clear cut-off dates: A published schedule aligns birth years with new eligibility ages, giving households time to adjust plans.

This approach aims to provide predictability while protecting those nearest to retirement.

What it could mean for workers

Potential advantages

• Higher lifetime earnings: Additional years of wages and superannuation contributions can materially boost retirement balances.
• Stronger compounding in super: Extra contributions, even for a few years, can significantly lift balances due to compounding returns.
• Flexible work pathways: If employers expand flexible hours, phased retirement, and remote options, many workers can balance health and income needs.

Key challenges

• Physical and health limits: Not all roles can be performed safely into the late sixties. Sectors like construction, aged care, hospitality, and manufacturing face unique constraints.
• Care responsibilities: Many older Australians provide unpaid care for partners, parents, or grandchildren. Longer working lives can strain these responsibilities.
• Regional disparities: Job options for mature-age workers vary across regions, which may complicate extended participation.

What it could mean for employers

• Workforce design: More mature-age employees require stronger attention to ergonomics, safety, task rotation, and role redesign.
• Retention policies: Flexible schedules, partial duties, mentoring roles, and phased retirement programs can preserve institutional knowledge.
• Upskilling and reskilling: Training mature-age workers in new systems and technologies increases productivity and employability.
• Health and wellbeing: Targeted wellness programs, preventive care access, and return-to-work pathways will matter more.

Superannuation and retirement strategy implications

• Later drawdowns: A higher pension age often pushes households to rely on superannuation or private savings for longer before Age Pension eligibility begins.
• Contribution strategy: Extra years of Super Guarantee contributions and voluntary top-ups can create a meaningful difference in final balances.
• Sequencing risk: If you plan to leave the workforce before the new pension age, build a bridge using super, personal savings, or part-time income to reduce the risk of selling assets in down markets.
• Income layering: Consider a staged approach that mixes part-time work, account-based pension drawdowns, and later pension access to smooth cash flow.

Equity and exemption considerations

A fair framework typically includes:

• Medical exemptions: Pathways for people with chronic conditions or disability that limit ongoing work.
• Occupation sensitivity: Policies acknowledging physically demanding roles where extended work is impractical.
• Targeted supports: Job redesign, retraining, and placement assistance for affected cohorts and regions.
• Safeguards for carers: Flexibility for those with substantial unpaid care responsibilities.

How to prepare if you are mid-career or near retirement

1. Revisit your retirement age assumptions: If you planned around 67, model scenarios for 68, 69, and 70.
2. Update your super plan: Estimate contributions, investment mix, and likely drawdown start dates under a later eligibility age.
3. Stress-test your budget: Model healthcare, housing, and debt costs if working longer or stepping down to part-time.
4. Discuss flexible work early: If you want phased retirement, raise it with your employer well in advance.
5. Plan for contingencies: Include health setbacks, job changes, and caregiving needs.
6. Document skills and training needs: Keep credentials current to stay employable during later-career years.

Example timeline scenario

• Current settings: Age Pension access at 67.
• Proposed settings: Age Pension access phases upward to 70 over several years.
• Worker aged 59 today: Likely to experience a partial increase.
• Worker aged 45 today: More likely to see the full phase-in by their retirement window.
• Worker in a physical role: Should prioritise reskilling options, ergonomic support, or internal transfers to less demanding duties.

Risks to keep on your radar

• Health shocks: Longer work horizons increase exposure to unexpected health events.
• Employment gaps: Mature-age workers may face longer job searches after redundancy.
• Market downturns: Relying on super for longer raises sequence-of-returns risk if you must sell in a downturn.
• Policy timing: The pace and detail of any phase-in matter for your personal plan.

Frequently asked questions

Will the change affect people already retired?

No. Proposals like this typically apply to future retirees, with transitional rules for those nearing retirement.

What is the proposed new retirement age?

Public discussion has referenced a phased increase that could reach 70. Final design, timing, and thresholds would be set by legislation.

Why call it a lifetime gift?

The government frames longer careers as a pathway to higher cumulative earnings, more superannuation, and potentially better financial security in later life.

Can people with health issues get exemptions?

Policies of this kind generally include medical or hardship pathways. Expect defined medical criteria and assessment processes.

How should I adjust my super strategy?

Model a later retirement date, consider additional ontributions if affordable, and stress-test drawdowns for a longer pre-pension period.

What about physically demanding jobs?

A fair implementation would pair a higher age with job redesign, reskilling, occupational exemptions where justified, and stronger safety standards.

Does this change how much I can earn as I age?

The proposal focuses on eligibility age for pension access. Your ability to earn depends on your employment arrangements, skills, and health. Planning for flexible work can help.