ASFA says you need around $630,000 in super as a single, or $730,000 as a couple, to fund a comfortable retirement. The average Australian aged 65 to 69 is sitting on about $420,934. That’s not a gap caused by Australians failing to save. It’s a gap caused by most people only thinking seriously about retirement in the last few years of work, after the decisions that could have closed it have passed.
Retirement planning isn’t a single document or a one-off appointment. It’s the work of using the years, rules, and contribution rooms that close at specific ages, and structuring what you have into an income that lasts 25 to 30 years. This guide covers what good planning actually does, the decisions that only get harder if you put them off, and what it looks like in practice at different stages.
The gap most Australians retire with
The numbers from the latest ASFA research help frame why this matters.
The average super balance for Australians aged 65 to 69 is around $420,934, which is meaningfully below the $630,000 ASFA estimates a single homeowner needs for a comfortable retirement. For couples, the gap is wider. The lump sum benchmarks were revised in February 2026, the first change in three years, and now sit at $630,000 for singles and $730,000 for couples (both assuming a partial Age Pension).
A separate ASFA survey on retirement expectations of 1,500 Australians found that while average expected super balances for a comfortable retirement were broadly consistent with the ASFA standard, the distribution of answers was very wide. People are guessing. Some are wildly underestimating, others wildly overestimating. A more recent industry survey reported the figure Australians now believe they need has jumped to closer to $2 million, with Gen Z respondents naming $2.5 million. Most of that anxiety isn’t pointing to a real number. It’s pointing to a planning vacuum.
The point isn’t that you need $2 million. It’s that without a plan, you have no way of knowing whether you need $400,000, $700,000, or $1.4 million for the life you actually want.
Please note: All figures, projections and scenarios in this article are approximate and for illustrative purposes only. Individual outcomes will vary based on personal circumstances, investment returns, fees, and current government policy. This is general information, not personal advice.
What retirement planning actually does
“Retirement planning” gets used loosely. Three things make it concrete.
It tells you when you can actually stop work. Not “when you’re allowed to access super” (60 for anyone born after 1964) and not “when the Age Pension kicks in” (67). The real question is: at your current balance, your projected contributions, and your expected spending, how many years of full retirement can your money sustain? Phil framed this neatly on the podcast episode Is Early Retirement a Trap?: “When can I retire? It depends. How much money do you want to spend? How long do you want to live?” That’s the question planning answers.
It works out how to convert savings into income. Sitting on $700,000 in super at 60 doesn’t automatically translate into a comfortable lifestyle. Whether you transfer to an account-based pension, how much you draw each year, what investment mix sits behind it, whether you keep some in accumulation, and how the Age Pension layers in at 67, are all separate decisions. They compound.
It coordinates the moving parts. Super, the Age Pension, tax, investments outside super, the family home, and any inheritance plans all interact. Decisions made in isolation tend to leave money on the table. The clearest example is Centrelink: structuring how you draw down, and what you hold inside versus outside super, can materially change Age Pension entitlements over a 20-year retirement.
For more on how the components fit together, see our guide on which retirement plan is best in Australia.
The decisions that only get harder if you wait
Some retirement planning decisions are still available the week before you stop work. Most aren’t. The ones below have a window.
Catch-up concessional contributions. If your total super balance is under $500,000 at the start of the financial year, you can carry forward unused concessional cap from the previous five years. For someone in their 50s who never maxed out contributions, this can mean putting tens of thousands extra into super at the lower 15% tax rate. Once your balance crosses $500,000, the door shuts. Phil and Dan walked through a real worked example on the podcast episode How the Age Pension Really Works: a client used catch-up contributions to drop a $98,000 CGT bill to $11,000. That outcome was only possible because the contribution room was still open.
Investment mix transition. Moving from a growth-heavy portfolio to a more conservative one needs to be a decision, not a panic reaction in your last year of work. Scott unpacked this on the podcast episode Why Playing It Safe Can Cost You More: a couple with $500,000 in super spending $75,000 a year saw the growth portfolio fund retirement to their late 90s and the conservative one run out 15 years earlier. The transition needs to happen on your timeline, not the market’s.
CGT-aware timing of asset sales. Selling an investment property or share portfolio in your last working year, when you’re still earning, can mean tens of thousands more in CGT than waiting until the first year of retirement when your taxable income drops. This is purely a sequencing decision and it’s worth a lot.
Age Pension structuring. Whether you qualify for a part pension at 67 depends on assets and income tests. Choices about gifting, drawdown order, and how assets are held in the years before you apply meaningfully change the result.
Estate planning. Binding nominations, the tax treatment of super death benefits for non-dependants, and how blended family complexities are handled. All of these are easier to do well in advance of needing them.
Why the decade before 60 matters most
If there’s a single window where planning compounds hardest, it’s between roughly 50 and 60.
The catch-up contribution rules above. The compounding effect of an extra $10,000 to $20,000 a year going into super at 15% tax instead of marginal rates. Spouse contribution and contribution splitting strategies for couples whose balances are unevenly weighted. The first realistic look at what your retirement spending might actually be (most people overestimate it). Time to test investment risk tolerance before it matters in retirement.
In our work with clients, the pattern is fairly consistent: people who engage with planning 8 to 10 years before they stop have a meaningfully different set of options to people who engage 1 to 2 years out. It isn’t about the quality of advice. It’s about how many levers are still available to pull.
What planning looks like in practice
A retirement plan is not a binder full of generic recommendations. In practice it covers:
- A projection of your current and expected balance through to retirement, based on your real numbers
- A modelled view of when you could retire at different spending levels
- A drawdown strategy showing how super, Age Pension, and any other income combine year by year
- A contribution strategy for the years still ahead (catch-ups, salary sacrifice, spouse contributions where relevant)
- An investment allocation that fits the time horizon, with an explicit transition plan into pension phase
- Documented assumptions about returns, fees, and inflation, so the plan can be stress-tested
- A review cycle, because circumstances and government rules change
Australian-licensed advice is documented in a written Statement of Advice with fees disclosed in advance. ASIC’s MoneySmart retirement planner is also a useful starting tool if you want to model your own numbers before involving an adviser.
The psychology of why people don’t plan
Most people who avoid retirement planning aren’t doing it because they don’t care. They’re doing it for the same reasons most of us avoid difficult things: it feels intimidating, the timeline feels distant, and there’s always next year.
Scott opened the podcast episode The Psychology of Money with a line worth holding on to: “Your biggest financial risk right now is not the stock market. It’s not interest rates. It’s your psychology.” Avoidance is the default. So is anchoring to round numbers like $1 million that don’t actually reflect your situation. So is the fear that running the numbers will reveal something bad.
In our experience, the numbers are almost never as bad as people fear. Even where there’s a real gap, the more useful question is what can be done about it in the time available. Clarity beats anxiety every time.
Where to start, depending on where you are
In your 30s and 40s. The single biggest lever is consolidating your super into one strong-performing fund and reviewing your investment option. A 1% difference in net return over 30 years compounds into more than $100,000 on a $100,000 balance. Avoid paying multiple sets of fees across forgotten accounts.
In your 50s. This is the window for catch-up concessional contributions if your balance allows. Review your investment mix with retirement in mind, not just accumulation. Start running concrete projections rather than hoping the average will be enough.
Three to five years out. Map out the year you’d ideally stop, what your income needs will be, and how super, the Age Pension and any other assets will combine. Decisions about asset sales, downsizing, and contribution catch-ups all become time-sensitive.
In the year before retirement, or already retired. Focus shifts to drawdown structure, account-based pension setup, Age Pension application timing, and rebalancing investment allocations for pension phase rather than accumulation. The earlier conversations should have set up this year. If they didn’t, this is when most of the lifting happens.
FAQs
Why is retirement planning important if I already have super? Super is the foundation, but it isn’t the plan. The plan is how you convert that balance into income that lasts, when you can afford to stop, how the Age Pension fits in, and what tax structure makes sense. Many Australians have a good super balance but no strategy for turning it into a sustainable income.
When should I start retirement planning? The decade before retirement is where most decisions have the biggest compounding effect, particularly catch-up concessional contributions which close once your balance exceeds $500,000. But planning has value at any age. In your 30s and 40s it’s mainly about consolidating super and getting the investment option right. Closer to retirement it becomes more detailed.
Is retirement planning only for the wealthy? No. Planning often matters more for households with smaller balances because the Age Pension forms a larger part of retirement income, and Centrelink rules create real planning opportunities. Decisions about how to hold and draw down what you have can meaningfully change the entitlement.
Can I just rely on the Age Pension? You can, but you’d be planning for a modest lifestyle. From 20 March 2026, the maximum Age Pension is around $1,200.90 per fortnight for a single and $1,810.40 combined per fortnight for a couple. That’s an annual income of roughly $31,200 single or $47,000 couple. ASFA’s comfortable benchmark is around $54,240 single and $76,505 couple, which leaves a substantial gap that super or other savings need to fill.
How is retirement planning different from just using a super calculator? A super calculator projects your balance to a target age. A retirement plan covers what you do with that balance: how you turn it into income, how it interacts with the Age Pension and tax, what investment mix it sits in, and how it responds to changes in your circumstances. The calculator answers “how much”; the plan answers “what now”.
What’s the cost of not planning? The cost is rarely a single event. It’s usually a series of small missed opportunities: not using catch-up contribution room before it closes, paying CGT on an asset sale in the wrong financial year, holding cash through a long retirement and watching inflation erode it, applying for the Age Pension without optimising assets first. Individually small. Together, often six figures over a 25-year retirement.
Ready to map out your own plan?
If you’d like to talk through what good planning looks like for your situation, book a free chat with the Wealthlab team. No pressure, no jargon, no commitment.
Not ready for a call? The free Wealthlab retirement quiz takes 60 seconds and gives you a snapshot of where you stand and what to focus on first.
