By Philippa Billings, Chief Advice Officer, Otivo
Financial preparation for retirement tends to get reduced to a single line, build up your super. That's the biggest piece, but it isn't the whole puzzle. The people who arrive at retirement feeling settled have usually got several things in order at once, not just their balance. Thinking in terms of a few distinct areas turns a vague sense of should be doing something into a clear list. Here's how to prepare across the areas that matter.
Preparing financially for retirement means getting more than your super in order. It helps to work across four areas, your retirement income, your debt, your protection, and your plan. As at July 2026, the ASFA comfortable retirement benchmark is about $630,000 for a single and $730,000 for a couple at age 67, a useful reference point to prepare against.
What are the areas to get in order before retirement?
It helps to think in four areas, income, debt, protection and the plan. Income covers building your super and understanding what it and the Age Pension will produce. Debt covers reducing what you owe so less of your retirement income is committed before it arrives. Protection covers making sure your insurance and estate arrangements still fit. And the plan ties it together into a clear picture of how the years ahead are funded. Working through them one at a time is far less daunting than treating retirement as one enormous question.
How do you prepare your retirement income?
Start by understanding what your retirement will cost, then work back to the income that covers it. Building super through contributions within the caps is the core lever, and knowing how the Age Pension might supplement your own savings completes the picture. The ASFA comfortable benchmark, around $630,000 for a single and $730,000 for a couple at age 67, gives a reference to prepare against, though your own spending plans set your real target. The aim is to reach retirement knowing roughly what your annual income will be, not guessing at it.
How should you deal with debt before retiring?
Debt matters in retirement because it turns a portion of your income into a fixed obligation before you've spent a cent on living. Reducing high-interest debt, and forming a clear view on any remaining mortgage, means more of your retirement income is genuinely yours to direct. This doesn't always mean clearing every debt, since flexibility has value too, but entering retirement with debt under control removes a significant source of pressure from a finite income.
What about insurance and protection?
Protection needs often change as retirement approaches. Insurance held inside super, such as life or income protection cover, may become less necessary once you've stopped working and no longer rely on an income to protect, so it's worth reviewing rather than paying for cover that no longer fits. It's also a natural time to check that broader arrangements reflect your current wishes. Reviewing protection is about making sure what you hold still matches the life stage you're entering.
Why does having a plan tie it together?
Because the individual pieces only work when they're pointed at the same goal. A plan turns your income, debt and protection decisions into a single coherent picture of how retirement is funded, and it gives you something to measure against as circumstances change. For someone like a 60-year-old mapping the last stretch of work, a plan is what turns four separate to-do lists into one clear direction. What that plan looks like depends entirely on your circumstances.
Frequently asked questions
When should I start preparing financially for retirement?
The earlier the better for building super, since time and compounding do much of the work, but the years immediately before retirement are when the income, debt and protection decisions come into sharp focus. Most of the preparation intensifies in the final decade.
Do I need to clear all my debt before retiring?
Not necessarily. Reducing high-interest debt and forming a clear view on your mortgage matters, but keeping some flexibility can be valuable too. The goal is having debt under control so it doesn't dominate a finite retirement income.
Should I keep my insurance when I retire?
It depends on your circumstances. Some cover held inside super becomes less relevant once you no longer rely on a working income, so it's worth reviewing rather than assuming it should either stay or go.
Where to from here
Preparing across all four areas is what turns retirement from a worry into a plan. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a retirement planning module that pulls your income, savings and Age Pension eligibility into one projection, based on your age, balance, investments and goals. It gives the four areas a single place to come together.
Sources
- Association of Superannuation Funds of Australia — ASFA Retirement Standard, March 2026 update — superannuation.asn.au
- ASIC MoneySmart — preparing for retirement — moneysmart.gov.au
- Services Australia — Age Pension eligibility — servicesaustralia.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.