Each extra year you work does three things: you add to super, your money has longer to grow, and you spend fewer years living off it. For our example couple with $800,000 at 60, retiring at 60 supports about $71,000 a year to age 95; working to 65 lifts that to about $86,000, and to 67 about $91,000. The hardest years are the ones before the Age Pension starts at 67, when your portfolio pays for everything.
1. The ages that matter
- 60: preservation age. Once you retire, you can usually start an account-based pension from super, tax-free.
- 65: you can access super even if you keep working. Minimum pension drawdowns rise from 4% to 5%.
- 67: Age Pension age. A part or full pension can start, depending on your assets and income.
🎥 Watch me explain this
▶0:50The retirement red zoneThe retirement red zone: super, SMSFs and your last 5 years · from 0:50 · read the post
▶7:32If you’re 30, 40 or 50 todayHow much super should you have at 30, 40 and 50? · from 7:32 · read the post
2. 60 vs 65 vs 67
Working longer helps more than people expect, because it works three ways at once. But it’s not only about money: health, family and what you want to do with your time matter just as much. The aim is to know the trade-off, then choose.
🧮Visualise your retirement portfolioEnter your super and the income you need: see your cash buffer, core and satellites, and whether your money lasts.
See how a cash buffer pays your pension, and whether your money lasts, in good years and bad.
Illustration only, general information. Assumes cash earns 4%, the core 7% and satellites 8% a year after fees in normal years, and income rises with inflation at 2.5% a year. “A crash in year 1” assumes the core falls 25% and satellites 35%, then recover over two years; “Two bad years” assumes two falls in a row. Each year your income is paid from the cash buffer; after a good year the buffer is topped back up from your investments, after a bad year it isn’t, so you never sell shares after a fall unless the buffer runs out. Ignores tax and super pension minimums. Age Pension is estimated each year from your balance under the assets and income tests (homeowner rates from 20 September 2026, $50,000 of other assets, limits rising 2.5% a year); your actual entitlement depends on Centrelink. Real returns will be different.
3. The gap years
Before 67 there’s no Age Pension, so your portfolio carries the full load. That’s when your balance is highest and a market fall does the most damage. A cash buffer of two to three years matters most in exactly these years.
🎥 Watch me explain this
▶7:17Sequence of returns riskHow much do you need to retire in Australia? · from 7:17 · read the post- ▶5:54Lever 2: the Age PensionHow much do you need to retire in Australia? · from 5:54 · read the post
4. Ways to bridge the gap
- Part-time work. Even $20,000 a year from 60 to 67 takes a lot of pressure off your portfolio.
- Spend a bit less before 67, a bit more after. Once the Age Pension starts, your portfolio needs to do less.
- Transition to retirement. From 60, a transition-to-retirement pension lets you draw up to 10% a year while still working, though earnings aren’t tax-free until you retire or turn 65.
- Downsizing. From 55, you may be able to put up to $300,000 each from the sale of your home into super as a downsizer contribution.
- A bigger buffer. Three years if you retire well before 67.
5. The retirement red zone
The five years before and after you retire are the red zone: your balance is at its peak, and a fall hurts most. Get the structure right early: a cash buffer, a diversified core you can hold through a fall, and a plan for what you’ll do if markets drop.
🎥 Watch me explain this
▶58:38“Ten, five or two years from retirement, should I move away from core and satellite?”Live ETF Q&A: Tech breaks down as the Aussie market finds its feet · from 58:38 · see the Q&A notes- ▶11:06The pillow testThe retirement red zone: super, SMSFs and your last 5 years · from 11:06 · read the post
Worked examples: $500k, $750k, $1m, $1.5m and $2m in super.
Our free retirement plan works out your Age Pension year by year, your drawdown and a stress-tested ETF portfolio, as a PDF.
General information only, not personal advice. It doesn’t consider your objectives, financial situation or needs. Super, tax and Centrelink rules are complex and change; check with Services Australia, your fund or a licensed adviser. Examples are illustrations using the assumptions shown. ETFs named are examples, not recommendations; consider the PDS and TMD. Past performance is not a reliable indicator of future performance.
Frequently asked questions
What is the best age to retire in Australia?
It depends on your savings, health and plans. Financially, each extra year of work adds contributions, gives your money longer to grow and shortens retirement. Many people aim for 60 to 67.
Can I access my super at 60?
Usually yes, once you’ve retired. From 60 you can start a tax-free account-based pension. From 65 you can access super even if you keep working.
When does the Age Pension start?
Age Pension age is 67. How much you get depends on the assets test and the income test.
How do I fund retirement before the Age Pension?
From your super and other investments, often with part-time work, a cash buffer of two to three years, or a transition-to-retirement pension if you’re still working.
What is the retirement red zone?
The five years either side of retirement, when your balance is at its highest and a market fall can do the most damage.