By Paul Feeney, Founder and Chief Executive Officer, Otivo
Two ages govern retirement in Australia, and they're seven years apart. Super generally becomes accessible at 60. The Age Pension starts at 67. Almost everything difficult about leaving work happens in the gap between those numbers — which is why treating retirement as a single date on a calendar tends to go badly, and why the people who find it straightforward have usually worked through a sequence rather than a decision. Here are the seven steps in that sequence, and where each one tends to stall.
Quick answer
Moving from work to retirement in Australia usually follows seven steps — setting a target date, costing the lifestyle, sizing the gap, choosing how to stop, preparing the super side, meeting a condition of release, and converting super into income. As at August 2026, super is generally accessible from age 60 and the Age Pension age is 67.
The two ages that shape the whole transition
Before the steps, the two dates that constrain them.
Preservation age is 60 for every Australian. The staggered table that once ran from 55 to 60 finished its phase-in on 1 July 2024, so there's no birthdate lookup left to do. Reaching 60 is the point preserved super generally becomes accessible.
Age Pension age is 67. That's the earliest point any Age Pension entitlement can begin, and it's subject to income and assets tests administered by Services Australia.
Between them sits a stretch of up to seven years that has to be funded privately. A 60-year-old finishing work entirely is covering their own costs until 67 — and that gap, not the total balance, is what most retirement arithmetic is actually about.
The seven steps, in order
- Set a target date, then treat it as a hypothesis. A specific date — "March 2029, at 63" — makes every later step calculable. It also tends to move once the numbers arrive, which is the point of writing it down early.
- Cost the lifestyle in annual terms. Not a lump sum, an annual figure. What does a year cost, once the mortgage, commuting and work clothes come out and travel, health cover and hobbies go in. ASFA's February 2026 Retirement Standard puts a comfortable retirement for a couple at $77,375 a year and a single at $54,840, assuming outright home ownership, which is a useful sense-check against a first estimate.
- Size the gap between spending and income. Three sources typically fill it — super, any Age Pension entitlement from 67, and savings or investments outside super. ASFA's lump sum benchmarks at 67 are $630,000 for a single homeowner and $730,000 for a couple. Where the gap looks large, that's information arriving early enough to be useful, which is the whole reason to do this step years out.
- Decide how you'll stop. All at once is one option. Reducing days, moving to contract or consulting work, or taking a lower-pressure role are others, and each changes the funding maths because employment income keeps flowing. Options are set out in winding down work instead of retiring all at once.
- Get the super side ready. Usually three things — consolidating multiple accounts where that makes sense, reviewing how the balance is invested given a shortening timeframe, and looking at whether contributions can be increased in the remaining working years. For 2026–27, the general concessional contributions cap is $32,500, a single combined limit covering employer super guarantee at 12%, salary sacrifice and personal deductible contributions together. It's the general cap rather than a hard ceiling, since members who qualify for the five-year carry-forward rule can have a higher effective cap in a given year: see how carry-forward concessional contributions work.
- Meet a condition of release, and tell the fund. Access to super isn't automatic at 60 — it turns on a condition of release. Retiring after 60 means ceasing gainful employment without intending to return to work for 10 or more hours a week, and funds generally need a declaration before treating benefits as accessible. Turning 65 is a condition of release on its own, whether or not work continues.
- Convert super into an income. A balance sitting in accumulation doesn't pay anything. Starting a retirement phase income stream is what turns it into a regular payment, and it's the step where the transfer balance cap of $2.1 million for 2026–27 becomes relevant. Covered in how to turn your super into a retirement income.
Where the sequence usually stalls
Three points, in the order they tend to bite.
Step two, because it's the least appealing. Costing a year of retirement means confronting a number, and estimating it is genuinely hard when the shape of the year is unfamiliar. It's also the input every other step depends on, so a rough figure now beats a precise one later.
Step four, because it's mistaken for a lifestyle question when it's a funding question. Working two days a week from 62 to 65 changes the arithmetic considerably more than most people expect, and it's often the difference between a plan that works and one that doesn't.
Step six, because the paperwork is invisible until it isn't. A retirement declaration that sits unsubmitted keeps a balance in accumulation phase, where earnings are taxed at up to 15% rather than being exempt. The tax treatment dates from the switch, not from the last day of work.
How early does this need to start?
Earlier for the steps that involve money, later for the steps that involve forms.
Steps one through five benefit from years rather than months, because contributions and investment decisions need time to matter. Steps six and seven are administrative and belong in the final months. The detail is in how long before retiring you should start planning and what to do in the final year before you retire.
For a 55-year-old, the useful work is in steps two and three — establishing the target and the gap while there's still time to act on the answer. For a 64-year-old, most of the value is in steps four through seven.
Frequently asked questions
Can you retire before 60 in Australia?
You can stop working at any age, but preserved super generally can't be accessed before 60 other than in limited circumstances such as permanent incapacity or a terminal medical condition. Retiring earlier than 60 means funding those years from savings outside super.
Do you have to stop working completely to access your super?
Not necessarily. Turning 65 is a condition of release regardless of employment. Before 65, the retirement condition of release requires ceasing gainful employment without intending to return to work for 10 or more hours a week — though a transition to retirement pension allows some access from 60 while still working.
Does the Age Pension start automatically at 67?
No. Age Pension age is 67, but entitlement depends on income and assets tests and requires a claim through Services Australia, which publishes the current rules and thresholds.
How much super do you need to retire in Australia?
There's no single figure, because it depends on annual spending, other income and how many years need funding. ASFA's benchmarks at 67 — $630,000 for a single homeowner and $730,000 for a couple — are national averages built on stated assumptions rather than an individual answer.
Where this leaves you
The transition from working to retirement is a sequence, and the early steps are the ones that carry the leverage. Getting an annual spending figure and a gap estimate in place at 55 changes what's possible at 62 in a way that no amount of paperwork at 64 can replicate. Otivo, a digital financial advice platform licensed under AFSL and Australian Credit Licence No. 485665, has a retirement planning module that brings age, salary, super balance, other investments, lifestyle goals, Age Pension eligibility and super access age into a single view — which is where the first three steps stop being guesswork.
Sources
- ATO, Transition to retirement. ato.gov.au
- ATO, Contributions caps. ato.gov.au
- ASFA, Retirement Standard, February 2026 release. superannuation.asn.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.