Difference Between Superannuation & Retirement

In the United States, people usually do not work for their entire lives; they typically cease working in their mid-60s. You may fund living after you stop working through retirement or superannuation accounts. Because some people use the terms "superannuation" and "retirement" interchangeably--even the Social Security Administration does so at times--you may have some confusion about the differences between retirement and superannuation.


Superannuation refers to retirement you take after you have reached a predetermined age. In most countries, the government sets this age. In the United States, you may retire between 65 and 67 years of age. By contrast, retirement refers to cessation of work that occurs at ANY age. Thus, superannuation always constitutes a type of retirement, but not all retirement constitutes superannuation.


With superannuation, your employer or the government act as your authority: setting aside monies on your behalf, which you may collect once you reach the designated retirement age. The employer funds usually are called pensions, while funds for superannuation in the United States come from Social Security. With retirement, you yourself contribute to your accounts. For example, you might put 10 percent of each paycheck into a savings account separate from the account into which your employer puts your pension--your employer doesn't even need to know about this savings account. Sometimes the authority is combined, however, such as with a 401k, in which you create a savings account with money deducted from your paycheck and additional funds from your employer.

Years of Work

Superannuation depends on the number of years you have worked. For example, you must have at least 10 years of work if you were born in 1929 or later to qualify for Social Security superannuation benefits, according to the Social Security Administration. To draw a pension, you must usually work a set number of years with the same employer. Retirement has no years-of-work requirement. For example, if you started a business and made a few million dollars in just a year, you could retire. Similarly, you could retire after just a few years due to disability. This means that, technically, you could retire multiple times using different careers--something you couldn't do in most cases with superannuation.