Retirement Planning in Australia: A Complete Guide for Pre-Retirees in Their 50s and 60s

If you are in your 50s or 60s, retirement is no longer a distant concept — it is a real and approaching milestone. Whether you feel well-prepared or quietly uncertain, this is the stage of life where the right decisions can make a significant difference to your financial security and quality of life for decades to come.

This guide covers everything Australian pre-retirees need to know: how much super you actually need, strategies to maximise your savings before you stop working, tax minimisation, age pension eligibility, healthcare planning, and the most common mistakes to avoid. It is written in plain English with current Australian figures, so you can take meaningful action — not just read theory.

Why Start Planning for Retirement Now?

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.

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.

How Much Super Do You Really Need?

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:

• $690,000 for a couple (combined super at retirement)
• $595,000 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 $100,000 for a single and $110,000 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?

Maximising Your Superannuation Before Retirement

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.

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.

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.

Investment Strategies for Pre-Retirees

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 (between 55 and 60, depending on your date of birth) 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.

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.

Understanding the Age Pension

The age pension is a key part of retirement income for most Australians. As of March 2026, the maximum fortnightly rate is approximately $1,144 for singles and $1,725 for couples combined. Over a year, that adds up to roughly $29,750 for a single and $44,850 for a couple.

Eligibility depends on two tests:

• The assets test: For a single homeowner, the full pension cuts out at approximately $314,000 in assessable assets (excluding your home). The pension reduces progressively and stops entirely at around $695,500. For homeowner couples, the cut-off for a full pension is approximately $470,000, tapering to zero at around $1,045,500.
• The income test: Uses deeming rates to assess income from financial assets, regardless of what those assets actually earn. The lower deeming rate (on the first $62,600 for singles or $103,800 for couples) is currently 0.25%, and the upper rate is 2.25%. If your actual investment returns are higher than the deemed amount, this works in your favour.

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.

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

Tax Minimisation in the Lead-Up to Retirement

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 $1.9 million). 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.

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

Planning for Healthcare and Aged Care

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 navigate this complex area with clarity and confidence.

Your Pre-Retirement Action Checklist

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

• Build an emergency fund: Have at least three to six months’ worth of living expenses in an accessible savings account. This covers you if there are delays in starting a pension or if unexpected costs arise in early retirement.
• Estimate your retirement expenses: Map out your expected annual spending, including rates, insurance, utilities, groceries, healthcare, vehicle costs, and any travel or hobbies. Many people underestimate what they will actually spend.
• Consolidate your super: If you have multiple super accounts, you may be paying duplicate fees and insurance premiums. Use your myGov account to find and consolidate lost or inactive accounts.
• Pay down high-interest debt: Prioritise paying off credit cards, personal loans, and car loans before retirement. If possible, aim to enter retirement mortgage-free — your budget will be significantly easier to manage.
• Review your insurance: Assess whether you still need life insurance, income protection, and trauma cover. Your needs change as you approach retirement, and you may be paying for cover you no longer require.
• Check your age pension eligibility: Use the Services Australia online estimator or speak to a financial adviser to understand how much pension you may receive and when.
• Create a retirement income timeline: Map out when different income sources will start — super pension, age pension, any rental income, part-time work — so you can manage cash flow through the transition.
• Update your estate plan: Review your will, powers of attorney, and superannuation death benefit nominations. These documents should reflect your current wishes, particularly if your circumstances have changed.

Common Retirement Planning Mistakes to Avoid

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

• Underestimating how long retirement will last. Planning for 20 years when you may live for 30 can leave you short. Build in a buffer.
• Not seeking advice until it is too late. The biggest opportunities to improve your retirement outcome exist in your 50s and early 60s. By the time you have already retired, many strategies are no longer available.
• Ignoring the age pension. Some people assume they will not qualify or that the pension is not worth much. In reality, even a part pension can add hundreds of thousands of dollars to your total retirement income over 25 years.
• Keeping too much in cash. While it feels safe, holding large amounts in cash or term deposits means your savings may not keep pace with inflation, especially over a long retirement.
• Making emotional investment decisions. Selling shares during a market downturn locks in losses. A well-structured investment plan with an appropriate asset allocation helps you avoid panic-driven decisions.
• Carrying unnecessary debt into retirement. High-interest consumer debt is a serious drag on retirement income. If you still have a mortgage, factor the repayments into your budget and consider whether accelerating payments before retirement makes sense.
• Failing to plan for aged care. Aged care costs can erode savings quickly and affect a surviving partner’s lifestyle. Planning ahead gives you more options and better outcomes.
• Not reviewing super fund fees and performance. Small differences in fees compound over time. A fund charging 1.5% versus 0.8% could cost you tens of thousands over a decade.

How Great Advice Can Help

At Great Advice, we specialise in helping Australians in their 50s, 60s, and 70s make confident decisions about retirement. Based in Springwood, Queensland, we serve clients across the Logan corridor, greater Brisbane, and beyond.

Our approach is straightforward. We start with a free initial Goals Meeting — no jargon, no pressure — where we review your current super, assess your age pension eligibility, look at your debts and expenses, and build a clear picture of where you stand. From there, we develop a personalised retirement strategy tailored to your goals, whether that means retiring sooner, retiring with more confidence, or simply understanding your options.

Our clients consistently rate us 5.0 stars across 52+ Google reviews, and we take pride in the trusted relationships we build with every person who walks through our door.

Ready to take the next step?

Call us on 07 3290 0393 to book your free consultation, or visit greatadvice.com.au to learn more about our services.

Key Takeaways

• The ASFA Retirement Standard estimates you need approximately $690,000 (couple) or $595,000 (single) in super for a comfortable retirement in 2024-25 — but your actual number depends on your circumstances.
• The age pension provides a significant income foundation for most retirees. Strategic planning around asset tests and deeming rates can maximise your entitlement.
• Concessional super contributions (capped at $30,000 in 2025-26, rising to $32,500 from 1 July 2026) offer one of the most tax-effective ways to boost your savings.
• Downsizer contributions of up to $300,000 per person can help convert housing wealth into retirement income.
• Reassessing your asset allocation and considering a Transition to Retirement pension can improve both your tax position and investment outcomes.
• Healthcare and aged care costs are often underestimated — plan for them early.
• Common mistakes include underestimating how long retirement lasts, ignoring the age pension, and leaving planning too late.
• Professional financial advice typically pays for itself through better super structuring, tax savings, and pension optimisation.

References

1. Association of Superannuation Funds of Australia (ASFA), ASFA Retirement Standard, September 2024 Quarter.
2. Australian Taxation Office (ATO), Key Superannuation Rates and Thresholds: Contributions Caps 2025-26.
3. Australian Taxation Office (ATO), Downsizer Contributions.
4. Australian Securities and Investments Commission (ASIC), MoneySmart: How Much Super You Need.
5. Services Australia, Age Pension: How Much You Can Get, March 2026 rates.
6. Services Australia, Assets Test for Age Pension, 2026.
7. Australian Bureau of Statistics (ABS), Life Tables, Australia 2022-2024.
8. Australian Taxation Office (ATO), Non-Concessional Contributions Cap.

General Advice Warning: This article contains general advice only and does not take into account your personal objectives, financial situation, or needs. Before acting on any information, consider its appropriateness to your circumstances. Great Advice is a Corporate Authorised Representative of Akumin Financial Planning Pty Ltd, AFSL 232706.