Retirement Planning Template for Australia

Retirement planning in Australia is shaped by superannuation, a system that accumulates steadily over decades and then holds the money until preservation age. For anyone born after 30 June 1964 that age is 60, which since 1 July 2024 means everyone still in the workforce. The compulsory 12% employer contribution is a forced savings mechanism many countries lack, and it puts as much weight on the drawdown strategy as on the accumulation years.

The Age Pension means test creates a planning consideration that reads as counterintuitive at first. As super balances grow they can reduce or remove Age Pension entitlement, because under the assets test the payment tapers by $3 per fortnight for every $1,000 of assessable assets above the free area. Each extra dollar of super above that point therefore comes with a partial offset in government support, which makes the total retirement income picture more complex than assuming more super always means more income.

The Transition to Retirement strategy becomes available at preservation age and lets someone draw an income stream from super while still working. Paired with salary sacrifice, employment income can be redirected into super at 15% tax while the TTR pension supplements the reduced salary. How well that works out depends on individual circumstances and on the marginal rate the sacrifice is displacing.

Healthcare costs in Australian retirement are cushioned by Medicare, which covers bulk-billed GP visits and public hospital care. Private health insurance, prescription medications through the PBS, dental and optical care remain out-of-pocket costs that tend to rise with age. The lifetime health cover loading on private insurance, which adds 2% to premiums for each year after age 30 without hospital cover, is another figure that shows up in retirement planning for anyone who took out cover late.