Please note: All figures, projections and scenarios in this article are approximate and reflect ASFA and government-published data at the time of writing. Individual outcomes will vary based on personal circumstances, investment returns, fees, and current government policy. This is general information, not personal advice.
The gap between what Australians need and what they have
The Association of Superannuation Funds of Australia (ASFA) publishes the recommended super balances for a comfortable retirement at 67. As at February 2026, the ASFA Retirement Standard sits at:
| Lifestyle | Single (lump sum at 67) | Couple (lump sum at 67) |
|---|---|---|
| Comfortable | $630,000 | $730,000 |
| Modest | $110,000 | $120,000 |
Annual spending at these standards is $54,840 single and $77,375 couple for comfortable, or $35,503 single and $51,299 couple for modest. The modest lump sums are much lower because the Age Pension covers most of the required income at that level.
The average super balance for Australians aged 60 to 64 sits at approximately $381,000 for men and $301,000 for women, based on ASFA’s analysis of ATO data. That leaves the average single retiree $200,000 to $300,000 short of the ASFA comfortable benchmark, and the average couple similarly short.
Scott and Phil covered this gap directly in Episode 19 of the Wealthlab Podcast: Is Early Retirement a Trap? The $150K Gap Most Aussies Miss. Their finding was that the average couple retiring today has around $540,000 in combined super, roughly $190,000 below the ASFA comfortable couple target. The pattern we generally see in practice is that most people arrive at retirement age with less than they realise they need, because they never modelled the actual numbers.
Why planning matters more than saving
The instinct is to think of retirement planning as “saving more”. That is part of it, but not the biggest lever. The larger levers, in rough order of impact, are:
- Timing of retirement. Working one to two extra years typically produces $60,000 to $100,000 in additional super plus reduces gap-year drawdown, often shifting the plan from tight to comfortable.
- Investment mix through retirement. The difference between a growth portfolio and a conservative portfolio over 25 to 30 years of retirement is often 10 to 15 years of additional funding, at the same average return.
- Drawdown structure. How you draw from super, and in what order across account-based pension, cash reserves, and part-time work income, materially affects tax and Age Pension entitlement.
- Age Pension interaction. Structuring assets so the Age Pension income assessment works in your favour can add $5,000 to $10,000 a year to retirement income.
- Housing decisions. Whether you own outright, downsize, or rent shapes the entire budget. The family home is exempt from the Age Pension assets test, which changes the maths of downsizing.
- Contribution strategy in the last decade of work. Catch-up concessional contributions, salary sacrifice, and spouse contributions can add $100,000 to $200,000 to the balance across a 10-year window.
None of these are about “just saving more”. They are about deciding, in advance, how the pieces will fit together. That is what retirement planning actually is.
The specific consequences of not planning
Without planning, the most common outcomes we see fall into three patterns.
Pattern 1: Overspending early, running short later. Retirees who do not know how long their money needs to last often spend at their working income level in the go-go years, then face a sudden drop at 75 or 80 when the balance runs down and only the Age Pension is left. This is the most stressful of the three patterns because it is only visible when the money is nearly gone.
Pattern 2: Underspending, arriving at 85 with money they can no longer use. The opposite pattern. Retirees who never modelled their drawdown assume the money must be preserved, so they underspend in the healthy years when they could travel, help family, or pursue interests. By 85, when spending naturally slows and healthcare rises, they discover the caution was unnecessary.
Pattern 3: The right level of spending, adjusted as things change. Retirees with a plan can spend confidently because the numbers have been modelled. They know how the Age Pension takes over as super draws down. They understand how their spending will change through the phases of retirement. This is the pattern we see with clients who plan properly.
Scott put the psychology of this directly on Episode 8 of the Wealthlab Podcast: The Psychology of Money: “The goal isn’t to die with the largest super balance possible. The goal is to convert capital into confident living.” Planning is what makes confident living possible. Without it, most retirees swing between the two failure patterns.
When to start retirement planning
Different life stages call for different focus areas.
In your 30s. The main lever is contribution habit. Small increases to super contributions early in your career compound over 30 to 35 years into meaningful additional retirement funding. At this stage, planning is mostly about not doing anything actively harmful (like consolidating into a poor fund) and setting up the accumulation to work.
In your 40s. The middle decade of accumulation. Balance building, investment mix, and starting to model where retirement is likely to land. Catch-up concessional contributions (available if your total super balance is under $500,000) become a useful lever, particularly for anyone who took career breaks or had lower earning years.
In your 50s. This is where retirement planning becomes concrete rather than abstract. Ten to fifteen years to retirement means the numbers can be modelled with reasonable accuracy, and the decisions of this decade shape the retirement position significantly. Contribution strategy, mortgage payoff timing, investment mix as retirement approaches, and the interaction between super and the Age Pension all need to be thought through.
In your late 50s and early 60s. The final years before retirement are where most of the strategic decisions get locked in. Preservation age, condition-of-release timing, transition to retirement pensions, choice between lump sum access and account-based pension, and how the Age Pension will layer in at 67. This is also when working with an adviser tends to produce the largest measurable impact on retirement outcomes, because the levers are still fully available and the timeline is short enough to model accurately.
The specific pattern we generally see in practice is that clients who engage with proper retirement planning at 55 to 58 arrive at 67 with meaningfully more retirement income than those who leave it to their mid-60s. This is not about market timing. It is about the mechanical effect of five to ten additional years of contribution strategy, tax structuring, and asset allocation working together.
The specific benefits of planning
Beyond the “avoid the failure patterns” framing, there are specific measurable benefits of retirement planning worth being explicit about.
Tax efficiency during accumulation. Salary sacrifice into super saves tax at your marginal rate (up to 47% for higher earners) in exchange for 15% contributions tax. On $10,000 salary sacrificed at a 32% marginal rate, that is roughly $1,700 in additional capital working for you compared to the same amount taken as salary.
Tax efficiency during retirement. Withdrawals from a taxed super fund after age 60 are generally tax-free. Investment earnings inside a retirement phase account-based pension are also tax-free, up to the $2.1 million Transfer Balance Cap (from 1 July 2026). This is one of the most favourable tax structures in the Australian system.
Age Pension optimisation. With the right asset structure, some retirees who expect to receive nothing from the Age Pension find they qualify for a part pension worth thousands of dollars per year. The interaction between super drawdown pattern, asset ownership, and the means tests is technical enough that most people miss opportunities. Scott and Phil walked through commonly missed Age Pension opportunities in Episode 20 of the podcast.
Sequencing risk management. Retirees who draw down through a bad market year early in retirement can lose 10 to 15 years of retirement funding from that single event, unless the drawdown pattern is structured to protect against it. Planning includes cash buffers, drawdown pattern design, and investment mix that reduces this risk.
Timing decisions with real information. “Can I afford to retire?” is one of the most common questions Australians ask, and the honest answer requires modelling. Retirement planning gives you a real number rather than a hope.
The cost of professional retirement planning
The most common objection to getting professional advice is cost. Worth being direct about this.
A comprehensive statement of advice for someone approaching retirement typically ranges from $3,500 to $8,000 depending on complexity. Ongoing service fees usually sit between $3,000 and $8,000 per year, or a percentage of assets under advice.
The question is what value that produces. For most Australians with $300,000+ in super and 5 to 15 years before retirement, the tax savings, Age Pension optimisation, investment mix improvements, and drawdown structuring typically produce many multiples of the advice cost over the retirement lifetime. For balances below $200,000, professional advice may not be cost-effective, and free tools like ASIC’s MoneySmart Retirement Planner and industry fund calculators are often enough.
Scott and Phil talked about spotting the difference between real advice and thin, product-focused conversations in Episode 23 of the podcast. The key differentiator is whether the advice addresses your full financial picture (super, Age Pension, spending, tax, drawdown) or just recommends a product.
The most common retirement planning mistakes
Six patterns we consistently see cause problems.
Assuming super will be enough. For most Australians, super alone will not fund a comfortable retirement. The Age Pension is designed to supplement retirement income, which changes how the super needs to be structured to interact with pension eligibility.
Shifting to conservative too early. Moving to cash or ultra-conservative options at 55 to 60 sacrifices 25+ years of investment growth potential to protect against short-term volatility. This is often the single largest retirement planning mistake.
Ignoring the “balanced” fund label. As Phil pointed out in Episode 22 of the podcast, most super funds label their default option “balanced” when it actually holds 70% or more in growth assets. Understanding what your fund actually holds matters more than what it is called.
Underestimating healthcare costs. Healthcare consumes around 34% of average retirement savings. Budgets that treat healthcare as a small line item run into problems in the mid-70s onward.
Missing catch-up contribution windows. Anyone whose total super balance is under $500,000 can use unused concessional cap space from the previous five financial years. This is a substantial opportunity that many people miss in their 50s.
Making housing decisions without modelling the Age Pension impact. Downsizing sounds obviously good, but converting an exempt asset (the family home) into an assessable one (cash) can reduce Age Pension entitlement in ways that offset the downsizing benefit. Scott and Phil covered the specific traps in Episode 2 of the podcast.
What a proper retirement plan actually covers
If you engage with a financial adviser for retirement planning, a proper plan should cover:
- Where you are today (super balances across all funds, investment mix, other assets, debts, income)
- What retirement you want to live (spending level, timing, lifestyle expectations)
- The gap between the two, if any
- Specific contribution strategy for the years remaining before retirement
- Investment mix through accumulation, transition, and pension phases
- Drawdown strategy: how you will access super and in what order
- Age Pension interaction and optimisation
- Tax planning across the transition from working to retirement
- Estate planning intersections, particularly super death benefit nominations
- Ongoing review structure (usually annually) to adapt as circumstances change
A plan that covers only one or two of these categories is not a retirement plan. It is a product recommendation dressed up as one.-year retirement.
Frequently asked questions
Why is retirement planning important in Australia?
Because Australians are retiring on less than the ASFA comfortable benchmark, living longer than they expect (average life expectancy is 83, with half living past 85), and facing costs that rise faster than the Age Pension is indexed. Without planning, most retirees fall into one of two patterns: overspending early and running short in their 80s, or underspending and arriving at 85 with money they can no longer meaningfully use. Planning is what makes it possible to spend confidently through a 25 to 30 year retirement.
What age should you start retirement planning?
Ideally in your 30s, when the compounding effect of consistent contributions is at its largest. Realistically, most Australians engage seriously with retirement planning in their 50s, when retirement becomes concrete rather than abstract. The pattern we generally see in practice is that clients who plan properly in their late 50s arrive at 67 with meaningfully more retirement income than those who leave it to their mid-60s.
Is it too late to plan for retirement at 55?
No. The 55 to 65 window is where retirement planning has the largest measurable impact on outcomes, because the levers (contribution strategy, investment mix, drawdown structure, Age Pension optimisation) are all still fully available and the timeline is short enough to model with reasonable accuracy. Anyone at 55 with meaningful super and 5 to 15 years until retirement should be modelling the numbers properly.
What’s the biggest mistake in retirement planning?
Shifting to cash or ultra-conservative investment options too early. Moving out of growth assets at 55 or 60 sacrifices 25+ years of investment growth potential to protect against short-term volatility that is usually recoverable. As Scott and Phil covered in Episode 1 of the Wealthlab Podcast, the difference between a growth portfolio and a conservative portfolio over a full retirement is often 10 to 15 years of additional funding at the same average return.
Do I need a financial adviser to plan for retirement?
Not necessarily. Free tools like ASIC’s MoneySmart Retirement Planner and industry fund calculators are often adequate for balances under $200,000 or for simpler situations. For balances above $300,000, or for anyone with complex circumstances (business ownership, blended families, significant assets outside super, Age Pension optimisation opportunities), professional advice typically produces value that exceeds its cost over the retirement lifetime.
How much does professional retirement planning cost in Australia?
A comprehensive statement of advice for someone approaching retirement typically ranges from $3,500 to $8,000 depending on complexity. Ongoing service fees usually sit between $3,000 and $8,000 per year, or a percentage of assets under advice. What matters more than the absolute fee is whether the advice covers your full financial picture (super, drawdown, tax, Age Pension, estate planning) rather than recommending a product.
How much super do I need to retire in Australia?
The ASFA benchmarks at February 2026 sit at $630,000 for a comfortable single retirement and $730,000 for a couple. For a modest retirement, the benchmarks are $110,000 single and $120,000 couple, because the Age Pension covers most of the required income at that level. Most Australians retire with less than the comfortable benchmark, which is why the Age Pension is designed to supplement retirement income for the majority of retirees.
What happens if I don’t plan for retirement?
The two most common outcomes are: overspending in the early years and running short at 75 to 85 when the balance is drawn down, or underspending and arriving at 85 with a large balance you cannot meaningfully use. Both patterns are avoidable with proper modelling of drawdown, Age Pension eligibility, and expense patterns across the retirement phases.
What’s the difference between retirement planning and financial planning?
Retirement planning is a subset of financial planning specifically focused on the accumulation, transition, and drawdown phases of retirement. Financial planning is broader and includes wealth building during working years, insurance, estate planning, and tax structuring. Most Australians benefit from both, but retirement planning becomes the dominant priority in the last 10 to 15 years of work.
Can I plan for retirement if I’m self-employed?
Yes, and it matters more for self-employed Australians because there is no employer Superannuation Guarantee contribution unless you pay yourself as an employee. Self-employed workers can make personal deductible contributions to super up to the concessional cap ($32,500 for 2026-27) and claim a tax deduction. The catch-up concessional rule (using unused cap space from the previous five years) is particularly useful for self-employed workers with lumpy income.
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.
