By Paul Feeney, Founder and Chief Executive Officer, Otivo
The last five years before retirement are the ones that reward attention most, and the ones people most often drift through on autopilot. It's the stretch where decisions still have time to work, but where mistakes have the least time to recover. Treated as a countdown rather than a cliff edge, these years are a chance to arrive at retirement deliberately rather than by surprise. Here's a sense of what to look at, and roughly when.
Quick answer
The five years before retirement are best approached as a countdown of reviews rather than a single decision. Broadly, the early years are for boosting super and reducing debt, the middle years for shaping your investment approach and income plan, and the final year for the practical switch to drawing an income. As at July 2026, you can generally access super from age 60 on retiring.
Five years out, what should you focus on?
This is the window for the moves that still need runway. Boosting super carries the most weight here, since contributions made now still have a few years to benefit from the concessional tax treatment, and carry-forward may allow a larger catch-up if you have unused cap and are eligible. It's also the time to get serious about high-interest debt and to form a clear view on any mortgage. Decisions made five years out have time to compound, which is exactly why they belong at the start of the countdown.
Three to four years out, what changes?
The focus shifts from building to shaping. This is a natural point to review your investment option, since the balance between growth and stability matters more as the years you can afford to ride out a downturn start to shrink. It's also when a clearer picture of your retirement spending should take shape, turning a vague target into a real annual figure. For someone like a 62-year-old three years from stopping work, this is the stretch where the plan moves from rough to specific.
Two years out, what should you check?
Now the practical details come forward. It's worth confirming your Age Pension position in general terms, understanding how your super will convert into income, and checking that your insurance and other arrangements still suit the stage you're entering. Consolidating any stray super accounts, if you haven't already, tidies the picture before you start drawing on it. The aim two years out is to have no loose ends that could complicate the switch to retirement income.
The final year, what happens?
The last year is about execution. This is when many people decide how to turn super into income, commonly by moving it into an account-based pension, and confirm the timing of their final working days. It's also when any Age Pension claim is prepared, since eligibility and timing need to line up with when you stop work. The groundwork of the previous four years is what makes this final step feel like a handover rather than a leap.
Frequently asked questions
Is five years enough time to prepare for retirement?
For the decisions that matter most, yes. Five years is enough for contributions to work, for debt to be brought under control, and for an income plan to take shape. The earlier stretch does the building, the later years do the shaping and switching.
What's the most important thing to do before retiring?
There's no single item, but arriving with a clear picture of your retirement income, and with debt under control, tends to matter most. The countdown structure exists so nothing important is left to the final weeks.
When should I move my super into a pension?
Commonly in the final year or at retirement itself, once you've met a condition of release. Moving super into an account-based pension shifts it into the generally tax-free retirement phase, so many people time it with the end of work.
Where to from here
Approached as a countdown, the last five years turn retirement into something you walk towards rather than stumble into. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a retirement planning module that shows where your current path leads and what could improve it, based on your age, balance, investments, spending and goals. It's a useful companion for each stage of the countdown.
Sources
- Australian Taxation Office — preservation age, conditions of release, carry-forward and retirement phase — ato.gov.au
- Services Australia — Age Pension eligibility and claiming — servicesaustralia.gov.au
- ASIC MoneySmart — the years before retirement — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 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.