Retiring at 55 with $400,000 in super is a bold move and while it’s possible, it comes with some serious challenges. At this age, you’re well ahead of the traditional retirement timeline, which means you’ll need to plan carefully to make your money last for what could be 30–40 years.
The biggest hurdle is the long gap before you can access the Age Pension at 67. That’s 12 years of fully funding your lifestyle from your super and any other savings. If you’re determined to make early retirement work, it’s all about strategy, discipline, and smart investing.
What Happens Financially at 55?
At 55, you may not have reached your preservation age yet (depending on your date of birth), which means you might not be able to access your super right away unless you meet certain conditions, such as permanent retirement or starting a transition-to-retirement (TTR) pension.
Even if you can access your super, you’ll need to plan for self-funding your lifestyle for over a decade before any government support kicks in. That means sticking to a realistic budget, protecting your capital, and finding ways to generate additional income if needed.
What Retirement Costs Look Like
The ASFA Retirement Standard (March 2024) estimates:
- Modest lifestyle (single): ~$32,000/year
- Comfortable lifestyle (single): ~$51,000/year
These figures assume:
- You own your home outright
- You use public healthcare
- You live independently
💡 With $400k, aiming for around $28,000–$32,000 per year will give your savings a better chance of lasting. Going beyond that too early risks depleting your super before you reach Age Pension eligibility.
What Happens at Age 67?
At 67, you can apply for the Age Pension, which is means-tested based on your income and assets. If your super has significantly reduced by then, you may qualify for a full or part pension.
Current Full Pension Rates (July 2024):
- Single: ~$29,000/year
- Couple (combined): ~$43,800/year
The Age Pension can then top up your reduced super balance, helping you sustain a modest lifestyle well into your later years.
Graphice: This chart illustrates how a $400,000 super balance would deplete over time starting at age 60, depending on your annual spending.As shown, your annual lifestyle costs have a major impact on how long your super will sustain you.
How to Make Retirement Work on $400,000 Super
✅ 1. Own Your Home
Without mortgage or rent expenses, your living costs drop dramatically. This frees up your super to cover daily expenses, travel, and emergencies instead of large housing costs.
✅ 2. Set Up an Account-Based Pension
Turning your super into a regular income stream keeps your funds invested while giving you predictable, tax-free payments. This can help stretch your money and provide financial stability.
✅ 3. Keep a Balanced Investment Mix
Holding a blend of low-risk assets and moderate growth investments helps protect your super from inflation while reducing volatility. Keeping 1–2 years of living expenses in cash provides a safety net.
✅ 4. Budget Below the ASFA Modest Standard
Spending around $28,000–$30,000 per year instead of the full $32,000 gives you more financial resilience and reduces the risk of running out of money too soon.
✅ 5. Explore Flexible Income Options
Even occasional part-time or consulting work in your 50s and early 60s can ease pressure on your super, extend its lifespan, and offer extra funds for leisure activities.
Retiring at 55 with $400k super is possible but it’s not without risk. The key is to own your home, budget modestly, keep your money invested wisely, and consider supplementing your income early on. By carefully bridging the 12-year gap until the Age Pension, you can enjoy an earlier retirement without sacrificing long-term financial security.
Ready to Plan Your Early Retirement?
If you want to make $400k last through a long retirement, you’ll need a clear, customised strategy and that’s where Wealthlab can help. Our retirement planning experts work with you to optimise your super, minimise tax, and create a sustainable income plan that aligns with your lifestyle goals.
📅 Book your consultation today and take the first step toward a confident, stress-free early retirement. Visit Wealthlab.com.au to get started.