By Philippa Billings, Chief Advice Officer, Otivo
Most of the money in a retirement plan is decided years out. The final twelve months are different — they're where a handful of hard deadlines sit, and several of them exist in no other year of your working life. A contribution that misses 30 June can't be made up. A notice of intent lodged late generally means no deduction. A retirement declaration that sits in a drawer keeps a balance in accumulation phase and taxed. Here's the sequence, stage by stage.
The final year before retiring involves four stages — confirming the date and the numbers, using the last full year of contribution capacity before 30 June, handling the employer and leave side, and completing the super paperwork. As at August 2026, the general concessional contributions cap is $32,500 for 2026–27 and preservation age is 60.
Stage one, twelve to nine months out — confirm the date and re-run the numbers
The plan built at 55 was built on assumptions. This is the point to test them against reality, because there's still time to move the date if they don't hold.
Three things are worth re-checking. The annual spending figure, against twelve months of actual statements rather than the estimate used earlier. The super balance and how it's invested, given the timeframe is now short rather than long. And the intended finish date itself, which is easier to shift by three months now than by three weeks later.
Where the numbers have drifted, the levers are the same ones available all along — finishing later, winding down instead of stopping, or adjusting the spending assumption. Detail is in how do you know when you can afford to stop working.
Stage two, nine to three months out — the last full year of contribution capacity
This is the stage with the immovable deadline, because contribution caps run to 30 June and don't carry over except through the carry-forward rules.
For 2026–27 the general concessional contributions cap is $32,500. That's a single combined limit covering employer super guarantee at 12%, salary sacrifice and any personal deductible contributions added together — not three separate allowances. On a $120,000 salary, super guarantee alone consumes $14,400, leaving $18,100 of headroom before anything else counts.
It's the general cap rather than an absolute ceiling. Members who qualify for the five-year carry-forward rule can have a higher effective cap in a given year, which can matter considerably in a final working year where cash flow allows a larger contribution — the conditions are set out in how carry-forward concessional contributions work.
Two administrative points belong here.
- Personal deductible contributions require a valid notice of intent to claim a deduction, lodged with the fund before the earlier of two dates — the day the individual lodges their tax return for that financial year, or the end of the financial year after the contribution was made. The fund also has to acknowledge the notice before a deduction can be claimed.
- Non-concessional contributions are a separate cap — $130,000 for 2026–27, with up to $390,000 available under the three-year bring-forward arrangement for eligible individuals under 75, subject to Total Super Balance.
Timing inside the year matters more than usual, because contributions have to be received by the fund by 30 June, not merely sent.
Stage three, six to one month out — the employer and leave side
This is the least financial stage and the one most likely to produce surprises.
Notice periods are set by the employment contract or award, and giving notice is what fixes the last day. That date then drives everything in stage four, so it's worth settling before the super paperwork begins rather than after.
Accrued leave is the piece people miscalculate. Unused annual leave and long service leave paid out on termination are taxed under their own rules, which differ from the treatment of ordinary salary, and the ATO publishes the current treatment. Whether leave is taken before finishing or paid out at the end can change both the timing and the amount — a question worth asking payroll well before the last month.
One point specific to super. Employer contributions continue while employment does, and under payday super, which commenced 1 July 2026, contributions are required to reach the fund within seven business days of payday. The final contributions may therefore land after the last day of work.
Stage four, the final month and just after — the super paperwork
Four items, and the order matters.
- Meet the condition of release. Retiring after 60 means ceasing gainful employment without intending to return to work for 10 or more hours a week. Turning 65 is a condition of release in its own right, whether or not work continues.
- Tell the fund. Funds generally need a declaration before treating benefits as accessible or moving a pension into retirement phase. Until that happens, earnings continue to be taxed at up to 15% rather than being exempt — the treatment dates from the switch, not from the last day of work.
- Start the income stream. A balance in accumulation pays nothing. Converting it to a retirement phase income stream is what produces regular payments, and it's the point the $2.1 million transfer balance cap for 2026–27 becomes relevant. Covered in how to turn your super into a retirement income.
- Check the insurance position. Life, total and permanent disability and income protection cover held inside super is generally attached to a specific account and funded from its balance, and it can be affected when a balance moves or employment ends. Terms differ between funds, so the fund's own documentation is the reference point.
Where does the Age Pension fit in the final year?
Only if the finish date is close to 67, since nothing is payable before then.
Age Pension age is 67, and entitlement depends on income and assets tests administered by Services Australia. Claims can generally be lodged in advance of reaching the age rather than only afterwards, and Services Australia publishes both the current thresholds and the lodgement window. Anyone finishing work well before 67 has a gap to fund privately first, which is a stage one question rather than a stage four one.
Frequently asked questions
When should you tell your employer you're retiring?
Notice requirements come from the employment contract or applicable award, so that's the starting point. Practically, the last day needs to be settled before the super paperwork can be completed, since the condition of release depends on it.
Can you still make super contributions in your final working year?
Yes, subject to the caps and to age rules. The concessional cap for 2026–27 is $32,500 combined across employer super guarantee, salary sacrifice and personal deductible contributions, and contributions need to reach the fund by 30 June to count for that year.
Is it better to take leave or have it paid out?
Both are used, and the treatment differs — leave taken is paid as salary, while unused leave paid on termination is taxed under separate rules published by the ATO. The choice affects timing as well as tax, and payroll can confirm how a particular arrangement would be handled.
Does super stop being paid as soon as you finish work?
Employer contributions relate to work performed, so they stop when employment does, though the final payment may arrive up to seven business days after the last payday under payday super.
Where this leaves you
The final year is mostly about deadlines rather than decisions — the contribution cap that closes on 30 June, the notice of intent with two limbs, the declaration that switches the tax treatment. None of them are complicated individually, and all of them are easier to miss when they arrive at the same time as a career ending. Otivo, a digital financial advice platform licensed under AFSL and Australian Credit Licence No. 485665, has a retirement planning module and a tax-deductible personal contributions module that cover the numbers side of stages one and two.
Sources
- ATO, Contributions caps. ato.gov.au
- ATO, Concessional contributions cap. ato.gov.au
- ATO, Transition to retirement. ato.gov.au
Disclaimer
The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.