By Paul Feeney, Founder and Chief Executive Officer, Otivo
Almost nobody wrecks their retirement with a single bad decision. It's the quiet ones — staying in cash a decade too early, leaving a $250,000 balance on autopilot, never deciding how the money actually gets spent — that do the damage, because they compound for years before anyone notices. If retirement is somewhere between five and twenty-five years away, here are the eight mistakes that show up most often, and what tends to separate the people who avoid them.
The most common retirement planning mistakes Australians make include treating super as self-managing, shifting to cash too early, ignoring inflation, and having no plan to turn savings into income. Most of them are reversible. As at June 2026, the concessional contributions cap is $30,000 for 2025–26 (ATO), and acting earlier simply gives compounding more time to work.
Why do small retirement planning mistakes add up to big ones?
Because retirement outcomes are cumulative. Very few people derail their retirement with one dramatic call; far more often it's a run of small, reversible decisions made over decades that quietly add up. That's also the good news — most of these mistakes can be corrected, and the earlier you spot them, the more room you have to act. Time is the single biggest lever in building super, because compounding rewards the years more than the effort. A change made at 45 generally does more work than the same change attempted at 60.
It helps to know where plans tend to slip. Most retirement planning mistakes fall into four areas: what goes into super, how it grows, how it gets spent, and what protects it along the way. The eight below map onto those four.
Is your super on track, or just on autopilot?
"On track" means the balance is genuinely heading toward the lifestyle you want — not simply that contributions are landing each month. It's a common assumption that compulsory employer contributions, now 12% of wages since 1 July 2025, will quietly do the job on their own. They're a strong foundation, but the destination depends on income, fees, investment returns, career breaks, extra contributions and the age you retire. Two people on near-identical salaries can finish decades apart.
A related blind spot is holding several super accounts at once. It's surprisingly common after a few job changes, and it can mean paying multiple sets of administration fees and duplicate insurance premiums while losing sight of the total. Reviewing whether you're holding more than one account is something many Australians find useful — though it's worth checking any insurance attached to a fund before closing it, since closing the account can cancel the cover. Otivo's guide to consolidating super accounts walks through how that works.
Which contributions are people leaving on the table?
Australia's super system has several ways to add to your balance beyond compulsory employer contributions, and many people never use them. The first thing worth understanding is that the main types share a single cap rather than separate ones.
Concessional (before-tax) contributions include employer super guarantee (SG), salary sacrifice, and personal contributions you later claim a tax deduction for. They all count towards one combined cap — $30,000 for the 2025–26 financial year, according to the ATO. They are not three separate limits. The cap is indexed to wages (AWOTE) in $2,500 steps, which is why it stepped up from $27,500 to $30,000 — and it is set to rise again to $32,500 from 1 July 2026, the start of the 2026–27 financial year.
Salary sacrifice is one approach many Australians use: part of your before-tax pay is redirected into super instead of being paid as wages. A personal deductible contribution works differently — it's a contribution made in your own name that you later claim as a deduction. If you go that route, there's a step that catches people out. You have to lodge a valid notice of intent to claim a deduction with your fund, and the fund has to acknowledge it, before the deduction can be claimed. That notice has to be in before the earlier of the day you lodge your tax return for the relevant year, or the end of the financial year after the one in which you contributed. Age matters too: from 67 to 74, a work test (40 hours of paid work in 30 consecutive days, or the work test exemption) generally has to be met in the year of the contribution before a personal contribution can be claimed as a deduction.
There's also a higher-income consideration. Where combined income and concessional contributions exceed $250,000 in a year, an extra 15% tax (Division 293) applies to the contributions above that threshold, lifting the tax on them from 15% to 30%. That still leaves them concessionally taxed for someone on the top marginal rate — it changes the maths rather than removing the benefit.
For people whose income jumps around, the carry-forward rule can matter. It has two distinct parts — how it works, and who can use it.
How carry-forward works:
- It has been available since 1 July 2018.
- Unused concessional cap can be carried forward for up to five financial years.
- Unused amounts are used oldest first, and any amount unused after five years expires.
Who is eligible — all three conditions must be met:
- A total super balance under $500,000 on 30 June of the prior financial year.
- Unused concessional cap in one or more of the previous five financial years.
- Eligible to make super contributions, which generally means being under 75 (funds can accept contributions up to 28 days after the end of the month you turn 75).
Beyond concessional contributions, some people also look at non-concessional (after-tax) contributions, downsizer contributions for those aged 55 and over selling a long-held home, and spouse contributions. Otivo's guide on how to boost your super covers the main options.
Can you be too cautious with your super?
Moving money to safety as retirement nears feels prudent, and dialling down risk close to retirement can be appropriate. But shifting too far, too early carries its own risk, and it's easy to miss. The danger in retirement often isn't a market dip — it's outliving the money. Someone who stops work at 67 and lives to 92 may need their savings to last 25 years, and a 55-year-old could be looking at a horizon of 30 years or more. Over a stretch that long, how your super is invested is one of the levers that shapes the outcome. Otivo's super investment options guidance explains, in general terms, how different options work — without pointing to any one of them.
Inflation pulls in the same direction, just more quietly. At 3% a year, something costing $50,000 today runs to roughly $90,000 in 20 years, and everyday costs such as groceries, power and health care tend to climb fastest. A balance that looks ample now buys less later, which is why retirement income generally needs to keep growing alongside prices rather than simply holding steady.
What turns a super balance into a retirement income?
A retirement income plan is the bridge between the balance you've built and the money you live on. Plenty of people spend decades growing super and almost no time deciding how it gets drawn down. That gap leaves real questions hanging: how much can be withdrawn each year without the money running out, when to move from accumulation into a pension or account-based pension, and how Age Pension entitlements fit into the picture. Without a plan, retirees tend to err one of two ways — spending so cautiously they live smaller than they need to, or spending freely and risking a shortfall later. Modelling different scenarios is one way many people get a feel for what's sustainable and how long their super might last. Otivo's retirement planning tools let you test how contributions, retirement age and drawdown assumptions change the picture.
What happens to the plan if life changes?
Retirement planning is usually framed as building wealth, but protecting it matters just as much — and insurance is the part people most often forget. Many Australians hold personal insurance inside super and never revisit it, which means cover can drift to being too low, too high, or simply out of step with their life. Marriage, children, a mortgage or a career change all shift how much cover makes sense. As noted earlier, one thing worth checking before consolidating or closing any super account is whether insurance is attached to it, because closing the account can cancel that cover. Otivo's personal insurance guidance helps you think through how much cover inside super might suit your situation.
Frequently asked questions
How much super do I need to retire comfortably in Australia?
It depends on your lifestyle, whether you own your home, and how long you live. As a benchmark, the ASFA Retirement Standard (February 2026 release) estimates a single person retiring at 67 needs a lump sum of about $630,000, and a couple about $730,000, assuming they own their home outright. These are general guides rather than targets for any one person.
When can I access my super?
Super generally becomes available once you reach your preservation age — now 60 for anyone yet to retire — and meet a condition of release, such as retiring. A transition to retirement arrangement can allow access to part of your super while you're still working. The right timing depends on individual circumstances.
What is the most common retirement planning mistake?
There isn't one clear winner, but leaving super "on autopilot" is among the most common — assuming compulsory contributions alone will fund the retirement you want. Reviewing your position periodically, rather than only as retirement approaches, is what many Australians find most useful.
Is it too late to fix retirement mistakes at 55 or 60?
Rarely. Earlier changes have longer to compound, but options such as additional contributions, reviewing investment settings and planning the drawdown still matter close to retirement. The range of options does tend to narrow over time, which is why reviewing sooner usually helps.
Bringing it together
The sharpest question in retirement planning isn't "how much super do I have today?" — it's "am I on track for the retirement I want?" That's a question you can start answering now, whichever of these mistakes you recognise. Otivo, a licensed digital financial advice platform (AFSL and Australian Credit Licence No. 485665), can help you see your current position, model different scenarios and explore strategies that may improve your outcome, using the same retirement planning tools referenced above. When customers act on Otivo's advice in full, they could be better off on average by $180,356 through optimised contributions and $138,645 through smarter investment options, measured in today's dollars by retirement.
Disclaimer
The information in this communication is current as at June 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.