How much will you need?

There’s no single right number. What you need depends on the lifestyle you want, whether you own your home, your health, and how long your money has to last – which could easily be 25 to 30 years or more.

• Start with your spending: track what you spend now, then adjust for what changes in retirement – no commuting or mortgage, perhaps more travel and health costs.
• Use a benchmark: the ASFA Retirement Standard publishes regularly updated budgets for a “modest” and a “comfortable” retirement for singles and couples who own their home. It’s a useful reality check, not a target you must hit.
• Count every source: super, any military super pension, the Age Pension or Service Pension, investments outside super and any part-time work all contribute.

Moneysmart’s retirement planner can help you test different scenarios.

When can you access your super?

For anyone born on or after 1 July 1964, the preservation age is 60. You can generally access your super when you:

• retire after reaching 60
• leave a job at or after 60, even if you keep working elsewhere
• turn 65, whether or not you’re still working.

From 60 you can also start a transition to retirement income stream while still working, drawing up to 10% of the balance each year. Military schemes such as DFRDB and MSBS have their own benefit rules – see our military superannuation guide.

Turning super into income

A common way to draw an income is an account-based pension. Your balance stays invested, and you choose how much to take – as long as you draw at least the minimum each year.

• Transfer balance cap: there’s a lifetime limit on how much you can move into tax-free retirement phase. The general cap rose to $2.1 million on 1 July 2026, though your personal cap may be lower if you started a retirement income stream earlier.
• Military super pensions count too: DFRDB and MSBS pensions are valued at 16 times their annual amount for the transfer balance cap. They can’t be partly commuted to fit under the cap; instead, tax concessions are limited on income above the defined benefit income cap ($131,250 for 2026–27).

Tax in retirement

• From a taxed fund: once you’re 60, payments from an account-based pension or lump sums from a taxed super fund are generally tax-free, and investment earnings supporting a retirement income stream are generally tax-free in the fund.
• From an untaxed scheme: military super pensions such as DFRDB and MSBS generally include an untaxed component. From 60 this is taxed at your marginal rate plus the Medicare levy, less a 10% tax offset (the offset is limited on income above the defined benefit income cap).
• Outside super: investment income is taxed at your marginal rate. Tax offsets for seniors and pensioners may reduce what you pay.

The Age Pension

The Age Pension is paid by Services Australia from age 67 to people who meet residence rules and pass both the income test and the assets test – whichever test gives the lower rate applies.

From 20 September 2026, the maximum rate (including supplements) is $1,237.70 a fortnight for singles and $933.00 each for couples.

• Income test: singles can have up to $226 a fortnight of income (couples $396 combined) before the pension reduces – by 50 cents for each dollar over (25 cents each for couples).
• Assets test: your home isn’t counted. A single homeowner can have up to $333,000 in assets (couple homeowners $499,000 combined) and still receive the full pension. Above that, the pension reduces by $3 a fortnight for every $1,000, cutting out at $745,750 for single homeowners and $1,121,000 for couple homeowners. Higher limits apply to non-homeowners.
• Deeming: rather than counting actual returns, financial investments – including account-based pensions – are deemed to earn 1.75% on the first $66,800 for singles ($110,600 combined for couples) and 3.75% on the rest.
• Work Bonus: if you’re over Age Pension age and still working, the first $300 a fortnight of work income isn’t counted, and unused amounts build up to a maximum of $11,800.

Thresholds are indexed regularly, so check the current figures before relying on them.

DVA Service Pension and compensation payments

If you have qualifying service – generally, service in an operational area where you were exposed to danger from hostile forces – you may be eligible for the DVA Service Pension from age 60, seven years before the Age Pension. It is income and assets tested in a similar way to the Age Pension, and you can’t receive both at the same time. Partners of eligible veterans may also be eligible for a partner service pension.

How your other DVA payments are treated matters:

• Not counted as income for the Service Pension include the VEA disability compensation payment (formerly disability pension), MRCA Special Rate Disability Pension, MRCA and DRCA permanent impairment payments, and war widow(er)’s pension.
• For the Age Pension, the VEA disability compensation payment and MRCA permanent impairment payments are also not counted as income, but a war widow(er)’s pension is counted.
• Other payments, such as incapacity payments, may be treated differently, so check how each of your payments is assessed.

This means two veterans with the same assets can receive quite different outcomes depending on which payments they receive and which pension they claim.

Managing investment risk in retirement

Sequencing risk is the risk that markets fall just before or early in retirement, while you’re drawing an income. Selling investments after a fall locks in losses and leaves less to recover when markets bounce back.

• Some retirees hold a buffer of cash or defensive assets to cover a year or two of spending, so they’re less likely to sell growth assets at the wrong time.
• A military super pension or the Age Pension provides a base of regular income that isn’t tied to markets, which can reduce how much you need to draw from investments.
• Longevity matters too – planning for a long life helps reduce the risk of running out.

Things to weigh up

• Timing: when you stop work, when you start a pension and when you claim the Age Pension or Service Pension can all affect your income.
• Your home: it isn’t counted in the assets test, which can influence decisions about renovating, downsizing or moving. From 55, eligible people may be able to contribute up to $300,000 each from the sale of their home to super as a downsizer contribution.
• Your partner: Age Pension and Service Pension tests are applied to couples together, and balancing super between partners can help.
• Estate planning: check your will, powers of attorney and super beneficiary nominations, including any reversionary pension options.
• Aged care: future care costs are another reason to keep some flexibility in your plans.

Common mistakes to avoid

• Not checking Service Pension eligibility – veterans with qualifying service may be able to access income support years earlier than the Age Pension.
• Not telling Services Australia or DVA about changes – in income, assets or relationship status – which can lead to debts later.
• Overestimating the value of your assets – such as cars and contents, which are assessed at market value, not replacement cost.
• Drawing too much, too soon – or too little, and living more frugally than you need to.
• Treating a military super pension like an ordinary account – DFRDB and MSBS pensions are taxed differently, count towards the transfer balance cap and are generally assessed as income.
• Leaving it too late – planning five to ten years out gives you far more options.