If your super balance is on the lower side and you’re approaching retirement, the Age Pension isn’t a consolation prize. For many Australians, it’s the foundation that makes retirement actually work. Understanding how super and the Age Pension fit together is one of the most practically useful things you can do before you stop working.
This guide explains exactly how much super you can have and still get the full Age Pension, what happens as your balance grows, how $225K in super fits into the picture, and what retiring on a modest balance in Australia actually looks like in 2026.
How Much Super Can You Have and Still Get the Full Age Pension?
The Age Pension is means-tested, which means your super balance and other assets affect how much you receive. From 20 March 2026, the assets test thresholds are:
Full Age Pension (homeowners):
- Single: assessable assets under $321,500
- Couple: assessable assets under $481,500
Part Age Pension cut-off (homeowners):
- Single: assets up to approximately $674,000
- Couple: assets up to approximately $1,012,500
Your home is exempt from the assets test. Super in pension phase (account-based pension) is assessable once you reach Age Pension age.
So if you’re a single homeowner with $225,000 in super and minimal other assets, you’d be well under the full pension threshold and eligible for the maximum rate. The Age Pension doesn’t disappear the moment you have super. It reduces gradually as assets rise above the threshold, at a rate of $3 per fortnight for every $1,000 over the lower limit.
How Much Is the Full Age Pension in 2026?
From 20 March 2026, the maximum Age Pension rates (including all supplements) are:
- Single: approximately $29,000 per year ($1,116 per fortnight)
- Couple combined: approximately $43,700 per year ($1,682 per fortnight)
These rates are adjusted twice a year in March and September, indexed to whichever is higher between CPI and wage growth. You can check the current rates on the Services Australia Age Pension page.
That’s a meaningful income for a homeowner with low expenses. It covers ASFA’s modest retirement standard for singles ($35,503 per year) when combined with even a modest super drawdown.
Can I Retire With $225K Super in Australia?
Yes. $225,000 in super is below average, but retirement is absolutely achievable with the right structure. Here’s what it looks like honestly.Between age 60 and 67, your $225K has to do all the work. At $25,000 annual spending and a moderate return of 5 to 6%, your balance after seven years would be around $125,000 to $145,000. That’s still a working balance when the Age Pension starts.
From 67, a single homeowner with around $130,000 in super would be well below the full pension assets threshold. Combined income from the Age Pension (around $29,000 per year) plus super drawdown of around $6,500 to $8,000 per year gives a total income of roughly $35,000 to $37,000 annually. For a homeowner with modest expenses, that’s a workable retirement. Not lavish, but genuinely workable.
The critical factor is always the same: owning your home. Renters need significantly more because housing costs consume a large portion of the Age Pension before any other expenses are covered.
Run your own numbers through the free Wealthlab super calculator to see how your specific balance, age, and spending would play out.
What Happens to the Age Pension as Your Super Grows?
This is where a lot of people get confused. The Age Pension doesn’t switch off when you have super. It tapers.For every $1,000 in assessable assets above the lower threshold, your pension reduces by $3 per fortnight ($78 per year). So the difference in pension between $225K in assets and $325K in assets is roughly $300 per year less pension. That’s a taper, not a cliff.
Here’s what different super balances mean for Age Pension eligibility for a single homeowner in 2026:
| Super Balance at 67 | Age Pension Entitlement |
|---|---|
| Under $321,500 | Full pension (~$29,000/year) |
| $400,000 | Part pension (~$26,600/year) |
| $500,000 | Part pension (~$23,600/year) |
| $600,000 | Part pension (~$20,600/year) |
| $674,000+ | No pension entitlement |
These figures are approximate for a single homeowner with no other significant assets. Couples have higher thresholds. The Services Australia assets test page has the full details.
The takeaway is that having more super is always better, but the reduction in Age Pension as your balance grows is gradual. You don’t lose the pension just by having savings.
Who Can Get the Age Pension in Australia?
To receive the Age Pension, you need to meet all three criteria:
Age: You must be 67 or older. There are no exceptions for earlier access to the pension based on financial need.
Residency: You must be an Australian resident and have lived in Australia for at least 10 years, with at least five of those continuous. More detail on the who can get Age Pension page at Services Australia.
Means test: Both the assets test and income test apply. You’ll be paid based on whichever test gives the lower result.
One thing people miss is that the family home is exempt from the assets test but the proceeds from selling it are not. If you sell and downsize, the cash from the sale becomes an assessable asset until you buy another property. This is one of the traps Scott and Phil covered in Episode 2: Downsizer Contributions: The Hidden Traps You Must Know.
Can I Retire Early on Low Super? The Gap Between 60 and 67
The Age Pension starts at 67. Super can be accessed tax-free at 60. That seven-year gap is where planning matters most for people with modest balances.
With $225K in super retiring at 60, drawing $25,000 per year means your balance depletes by roughly $100,000 by 67, accounting for some investment return on the remaining balance. You’d arrive at Age Pension age with around $130,000 to $145,000 still invested, well under the full pension threshold.
The strategies that help most during this gap period:
Keep the investment mix working. Don’t switch to all-cash at 60. Even at a modest 5% return, $225K generates around $11,000 per year while you’re drawing from it. That extends how long it lasts considerably compared to cash at 2%. Scott covered why conservative doesn’t always mean safe in Episode 1: Why Playing It Safe in Retirement Can Cost You More.
Draw conservatively in the early years. $20,000 to $25,000 per year between 60 and 67 preserves more capital than $35,000. The difference at 67 is meaningful.
Consider part-time work. Even $10,000 to $15,000 a year in part-time income between 60 and 65 can halve the drawdown pressure on your super. It also means you arrive at 67 with a larger balance and potentially more pension entitlement.
Account-based pension structure. Converting your super into an account-based pension at 60 means fund earnings become tax-free. You control the drawdown amount and the balance stays invested. It’s the most efficient way to draw income from a modest super balance.
For guidance on structuring your drawdown, speak with a Wealthlab adviser who can model your specific scenario.
Retiring With Low Super: What the Age Pension Actually Covers
One of the most underappreciated facts about Australian retirement is how much the Age Pension covers for a homeowner with low expenses.
At $29,000 per year for a single, the full Age Pension covers:
- Groceries and household expenses
- Utilities and rates
- Basic private health insurance
- A modest car and running costs
- Occasional domestic travel
What it doesn’t comfortably cover on its own:
- Significant healthcare costs or major dental work
- Home repairs and maintenance
- Helping family financially
- International travel
This is where even a modest super balance of $150,000 to $250,000 makes a real difference. It’s not replacing the Age Pension. It’s topping it up for the things the pension alone can’t comfortably fund.
Phil explained this clearly on the podcast: for most Australians, the goal isn’t to live entirely off super. It’s to use super to move from a basic Age Pension lifestyle to a comfortable one. Even $200K to $300K in super can make that shift. For more on how the Age Pension and super work together, the MoneySmart Age Pension and government benefits page has a solid overview.
The Income Test: How Super Drawdowns Affect Your Pension
The income test works alongside the assets test. Centrelink uses deeming to assess income from your super and financial assets, meaning they apply a set rate of return to your balance regardless of what it actually earns.
From 20 March 2026, deeming rates are:
- 1.25% on financial assets up to $64,200 (singles) or $106,200 (couples)
- 3.25% on financial assets above those thresholds
For someone with $225K in super, the deemed income would be around $1,000 on the first $64,200 and roughly $5,200 on the remaining balance, totalling about $6,200 in deemed income per year. That’s well under the income test free area for singles ($5,512 per fortnight), so the income test wouldn’t reduce the pension in this scenario. The ATO’s page on accessing super to retire explains how super withdrawals are treated for tax and Centrelink purposes.
FAQs
How much super can I have and still get the full Age Pension?
From March 2026, a single homeowner can have up to $321,500 in assessable assets (including super) and still receive the full Age Pension. For a homeowner couple, the threshold is $481,500. Above those amounts, the pension tapers at $3 per fortnight for every $1,000 over the limit.
Can I retire at 60 with $225K in super?
Yes. The gap years between 60 and 67 are the main planning challenge. Drawing $20,000 to $25,000 per year from $225K while keeping it invested means you’d arrive at 67 with around $130,000 to $145,000 remaining, well within the full Age Pension threshold for a single homeowner.
How much is the Age Pension in 2026?
From 20 March 2026, the maximum full Age Pension is approximately $29,000 per year for singles and $43,700 per year for couples combined, including all supplements. Rates are adjusted in March and September each year.
What is the assets test for the Age Pension?
Centrelink assesses all assets except your primary home. For single homeowners, the full pension applies up to $321,500 in assets. The pension tapers above that and cuts out entirely at around $674,000. For couples, the cut-off is around $1,012,500.
Can I retire with no super and just the Age Pension?
Yes, if you’re 67 or older, meet the residency requirements, and your assets and income are within the limits. The full Age Pension for a single is around $29,000 per year, which covers a basic but functional lifestyle for a homeowner. It’s tight, but around 39% of Australians over 67 receive the full pension.
What counts as an asset for the Age Pension test?
Financial assets like super, savings, and investments all count. So do investment properties, cars, and most other possessions of value. Your primary home does not count. Gifts over certain limits may also be assessed.
How do I keep the Age Pension when I have super?
The key is understanding the taper rate and structuring your retirement income to stay within or just above the full pension threshold where possible. An account-based pension drawdown strategy designed around the assets and income tests can maximise your combined super and pension income. A financial adviser can model this for your specific balance.
Ready to Work Out What You’re Actually Entitled To?
The Age Pension and super interact in ways that most people don’t fully understand until they’re right at the retirement gate. A bit of planning before 67 can make a significant difference to your combined income.
Book a free 15-minute call with Wealthlab to get a clear picture of your Age Pension entitlements, how your super balance affects them, and what structure gives you the best combined income in retirement.