Retirement in Australia can last 25 to 30 years or more. According to the Australian Bureau of Statistics, a man aged 65 today can expect to live to around 85, and a woman to around 87. That is potentially three decades of living expenses, healthcare costs, and lifestyle spending that need to be funded, largely without a regular pay cheque.

The good news is that every year you spend planning before retirement multiplies your options. Decisions made in your 50s and early 60s (around superannuation contributions, debt reduction, investment strategy, and pension timing) often have a larger financial impact than anything you can do once you have already retired.

This is the question almost everyone asks first, and the answer depends on the kind of retirement you want.

The Association of Superannuation Funds of Australia (ASFA) publishes the most widely cited benchmarks. As at the 2024-25 financial year, the ASFA Retirement Standard estimates that for a comfortable retirement (which includes private health insurance, a reasonable car, regular dining out, and domestic travel), you need approximately:

• $730,000 for a couple (combined super at retirement)
• $630,000 for a single person

These figures assume you own your home outright and qualify for at least a part age pension.

A modest retirement (covering basic living expenses but with limited leisure spending) requires significantly less: around $110,000 for a single and $120,000 for a couple, with the age pension doing the heavy lifting.

The important thing to understand is that there is no single magic number. Your actual requirement depends on whether you own your home, your health, your lifestyle expectations, and how much age pension you can access. We explore this topic in much greater detail in our guide: How Much Super Do I Need to Retire Comfortably in Australia?

Where advice earns its keep

The earlier you start, the more levers you have available to pull. Even if you feel behind, a clear plan can close the gap more than you might expect.

The years immediately before retirement are your last and best opportunity to boost your super balance. Several strategies are available, and for many people, the combined effect can add tens of thousands of dollars to their retirement savings.

Concessional Contributions

Concessional contributions include your employer’s compulsory super guarantee payments plus any salary sacrifice or personal deductible contributions you make. The annual cap for 2025-26 is $30,000, rising to $32,500 from 1 July 2026.

These contributions are taxed at just 15% inside super, significantly less than most people’s marginal tax rate. For someone earning $90,000, salary sacrificing an extra $10,000 into super could save you roughly $2,250 in tax compared with taking that income as salary.

Non-Concessional Contributions and the Bring-Forward Rule

Non-concessional (after-tax) contributions have their own separate cap of $120,000 per year (2025-26). If you are under 75 and your total super balance is under $1.66 million, you can use the bring-forward rule to contribute up to three years’ worth (potentially $360,000) in a single financial year.

This strategy is particularly useful if you receive an inheritance, sell a property, or have other savings outside super that you want to move into the tax-effective superannuation environment before you retire.

Downsizer Contributions

If you are 55 or older and sell a home you have owned for at least 10 years, you can contribute up to $300,000 per person (or $600,000 per couple) into super as a downsizer contribution. This is available regardless of your total super balance, and it does not count towards your concessional or non-concessional caps.

The downsizer contribution can be a powerful way to convert housing wealth into retirement income, particularly if you are moving from a larger family home to something smaller and more manageable.

Where advice earns its keep

If you have not used your full cap in previous years and your total super balance is under $500,000, you may be able to carry forward unused amounts from up to five prior financial years. This can allow a much larger one-off contribution. Note that unused amounts from 2020-21 expire permanently on 30 June 2026, so check this with your adviser promptly.

Reassessing Your Asset Allocation

As you approach retirement, the balance between growth and stability in your investment portfolio becomes increasingly important. A portfolio heavily weighted towards shares may have served you well over a 30-year accumulation phase, but a sharp market downturn in the first few years of retirement (when you are drawing down your savings) can permanently reduce how long your money lasts. This is known as sequencing risk.

Most financial advisers recommend gradually shifting a portion of your portfolio towards more defensive assets (cash, fixed interest, and bonds) in the five to ten years before retirement, while retaining enough growth exposure (shares and property) to keep pace with inflation over a long retirement. There is no one-size-fits-all allocation. It depends on your total wealth, pension eligibility, and risk tolerance.

Transition to Retirement (TTR) Pensions

If you have reached your preservation age (60 for anyone born after 30 June 1964) but are still working, a Transition to Retirement pension allows you to access some of your super as an income stream while continuing to work and contribute.

A common TTR strategy involves salary sacrificing more into super (reducing your taxable income) while drawing a pension from your existing super to supplement your take-home pay. The net effect can be a meaningful tax saving, especially if you are in a higher tax bracket.

Where advice earns its keep

However, TTR strategies are not right for everyone, and the rules have become more complex since 2017. Professional advice is essential before setting one up.

The age pension is a key part of retirement income for most Australians. As of March 2026, the maximum fortnightly rate is approximately $1,200.90 for singles and $1,810.40 for couples combined. Over a year, that adds up to roughly $31,223 for a single and $47,070 for a couple.

Maximum Age Pension rates as at March 2026, including pension supplement and energy supplement.

Eligibility depends on two tests:

• The assets test: For a single homeowner, the full pension cuts out at approximately $321,500 in assessable assets (excluding your home). The pension reduces progressively and stops entirely at around $722,000. For homeowner couples, the cut-off for a full pension is approximately $481,500, tapering to zero at around $1,085,000.
• The income test: Uses deeming rates to assess income from financial assets, regardless of what those assets earn. The lower deeming rate (on the first $64,200 for singles or $106,200 for couples) is currently 1.25%, and the upper rate is 3.25%. If your actual investment returns are higher than the deemed amount, this works in your favour.

Asset test thresholds for homeowners, March 2026. Non-homeowner thresholds are approximately $252,000 higher.

We help clients work through this process through our Age Pension Guidance service.

Where advice earns its keep

Whichever test produces the lower pension payment is the one that applies. The interaction between your super, other assets, and these tests is where strategic advice can make a real difference, sometimes tens of thousands of dollars per year.

The transition from working life to retirement offers several opportunities to reduce your overall tax burden:

• Salary sacrifice into super: Contributions taxed at 15% inside super versus your marginal rate (which could be 32.5%, 37%, or 45%) outside super.
• Personal deductible contributions: If you are self-employed or your employer does not offer salary sacrifice, you can make personal contributions and claim a tax deduction, up to your concessional cap.
• Move to pension phase: Once you retire and convert your super to an account-based pension, investment earnings inside the fund become tax-free (up to the transfer balance cap of $2.0 million for 2025-26, rising to $2.1 million from 1 July 2026). This compares with a 15% tax rate during the accumulation phase.
• Tax-free withdrawals after 60: If you are 60 or older, lump sum withdrawals and income stream payments from a taxed super fund are completely tax-free.
• Timing of asset sales: If you plan to sell an investment property or shares, consider the capital gains tax implications. Holding assets for more than 12 months qualifies for a 50% CGT discount. Selling after you retire (when your income may be lower) could also reduce the tax payable.

Where advice earns its keep

Tax planning is one of the areas where professional advice consistently pays for itself. A well-timed strategy can save you thousands.

Healthcare costs tend to rise as you age, and they are one of the most underestimated expenses in retirement planning. Consider the following:

• Private health insurance: Premiums increase with age, and the Lifetime Health Cover loading adds 2% to your premium for every year you are aged over 30 without hospital cover. Review your policy to ensure you are not over-insured or paying for extras you do not use.
• Out-of-pocket medical costs: Even with Medicare and private health insurance, dental work, specialist consultations, hearing aids, and allied health services can add up quickly.
• Aged care: The cost of residential aged care in Australia can be substantial. There is typically a basic daily fee, a means-tested care fee, and potentially a refundable accommodation deposit (RAD) that can exceed $400,000 in metropolitan areas. Understanding how aged care fees are calculated, and how they interact with the age pension and your asset structure, is essential for protecting your wealth and your partner’s living standards.

We strongly recommend discussing aged care planning well before it becomes urgent. Our Aged Care Planning service helps families work through this complex area with clarity and confidence.

Use this checklist to make sure you have covered the essentials in the years before you retire:

Use this checklist to make sure you have covered the essentials in the years before you retire:

After working with hundreds of pre-retirees over the years, these are the mistakes we see most often:

After working with hundreds of pre-retirees over the years, these are the mistakes we see most often: