To retire early in Australia, you need two pots of money: investments outside super to live on until 60, and super for the rest of your life. Work out your spending, multiply by 25 to 29, split that across the two buckets, then save as much as you comfortably can into low-cost ETFs. Add a cash buffer before you stop.
Retiring at 50, or even 45, is possible in Australia, but it takes more planning than retiring at 67. You need to cover the years before super, and make your money last longer. Here’s a step-by-step plan.
1. The three ages that matter
- Your FIRE age: when you choose to stop work.
- 60: your preservation age. Once you’ve retired after 60, you can usually access your super, and withdrawals from a retirement pension are tax-free.
- 67: Age Pension age. If your assets and income are low enough, a part pension can help in your later years.
The further your FIRE age is from 60, the more you need outside super.
🎥 Watch me explain this
▶2:16Why the super system isn’t designed for early retireesThe retirement red zone: super, SMSFs and your last 5 years · from 2:16 · read the post- ▶3:55Three levers of super managementThe retirement red zone: super, SMSFs and your last 5 years · from 3:55 · read the post
2. The four stages of early retirement
3. Eight steps to retire early
Our free FIRE calculator checks both buckets: money outside super to get you to 60, and super for after.
4. How big does bucket 1 need to be?
A quick guide: multiply your yearly spending by the number of years until 60, then take off a little for growth. To stop at 50 and spend $50,000 a year, you’d need roughly $400,000 to $450,000 outside super, assuming it keeps earning about 5% a year after inflation. Stop at 45 and it’s closer to $550,000. The calculator works this out exactly for your numbers.
Keep this bucket in a low-cost ETF core while you’re building it. In the few years before you stop, set aside a cash buffer inside it, so a crash just after you leave work doesn’t force you to sell.
5. Making the most of super
- Check your option. With decades to go, a low-cost, high-growth or indexed option can make a big difference.
- Use the caps wisely. Extra super is low-tax, but locked until 60. Fill bucket 1 first if you’re behind.
- Consolidate old accounts so you don’t pay fees twice.
- Remember the Age Pension. From 67, a smaller balance can mean some pension, which lowers the risk of running out. See our Age Pension guide.
Retiring a bit later? Our retire at 60, 65 or 67 guide compares the three.
6. Before you stop work
Run through this list: you’ve lived on your FIRE budget for a year, your cash buffer is in place, you know which bucket you’ll spend from each year, your insurance is sorted, and you have a plan for what you’ll do with your time. Then read the risks of FIRE once more.
🎥 Watch me explain this
▶0:10Three retirement investing mistakesHow to build a retirement portfolio with ETFs (Australia) · from 0:10 · read the post
▶9:33Your 5-step planHow much do you need to retire in Australia? · from 9:33 · read the post
Every FIRE guide, plus the calculator, in one place.
Frequently asked questions
Can you retire early in Australia?
Yes. You need enough invested outside super to cover the years until 60, when you can usually access super, plus enough in super for the rest of your life.
How much do I need to retire at 50 in Australia?
At $50,000 a year in spending, roughly $400,000 to $450,000 outside super to reach 60, plus enough in super to support you from 60. Your exact number depends on returns and spending.
When can I access my super?
Usually once you reach your preservation age of 60 and retire, or when you turn 65, whether you’re working or not.
Should I put extra into super if I want to retire early?
Only once your money outside super is on track. Super is low-tax but locked until 60, so it can’t pay for the years before then.
What is the best way to invest to retire early?
For most people, a low-cost, diversified ETF core outside super, a growth option in super, and a cash buffer of 1.5 to 3 years of spending from the day you stop work.