Retirement Planning Strategies for Different Life Stages

By Luke Volker, Partner and Senior Financial Advisor, Scone

Retirement planning is a cornerstone of financial security, particularly in Australia where the superannuation system plays a pivotal role. As Australians, we benefit from a robust framework designed to support us through our working years and into retirement. However, effective planning requires tailoring strategies to your life stage, considering factors like super contributions, tax implications, and lifestyle goals. With the Superannuation Guarantee (SG) rate now at 12% as of July 2025, employers are contributing more to your super, but personal strategies across early career, mid-career, pre-retirement, and retirement phases, are essential to maximize growth and ensure you’re prepared for a comfortable future.

Early Retirement Planning

In your early career—typically ages 20-35—you’re building foundations. At this stage, focus on establishing good habits rather than amassing large sums. Start by maximising employer contributions through salary sacrificing into super. The concessional contributions cap for the 2025-26 financial year is $30,000, which includes SG payments and any pre-tax contributions you make. If your employer pays 12% on a $80,000 salary, that’s about $9,600 annually, leaving room for additional contributions up to the cap. These are taxed at 15%, far lower than marginal tax rates for most earners. Diversify your super investments early; opt for growth-oriented funds with higher equity exposure, as you have time to recover from market dips. Avoid lifestyle inflation—track expenses and allocate bonuses to super rather than spending.

Mid-Career Retirement Planning

Moving to mid-career (ages 35-50), life complexities increase with family, mortgages, and career peaks. Here, debt reduction complements retirement planning. Prioritise paying down high-interest debts like credit cards before boosting super, but don’t neglect contributions. The non-concessional cap is $120,000 for 2025-26, allowing after-tax contributions without immediate tax. If under 75, you can bring forward up to three years’ worth ($360,000) if your total super balance is below $1.9 million. This is ideal after selling assets or receiving inheritances. Couples should consider spouse contributions for tax offsets up to $540 annually. Investment-wise, review your super fund’s performance. Estate planning also should be considered: nominate beneficiaries to ensure super passes efficiently, bypassing wills in many cases.

Pre-Retirement Planning

As you approach pre-retirement (ages 50-65), preservation and protection become key. Transition to retirement (TTR) strategies allow drawing a pension while working, reducing taxable income. For example, salary sacrifice up to the $30,000 cap and withdraw 4-10% from super as a pension, tax-free if over 60. This minimizes tax and preserves capital. Catch-up contributions are crucial: carry forward unused concessional caps from the past five years if your balance is under $500,000. Health checks are vital—consider private health insurance to avoid Lifetime Health Cover loading. Downsize property if feasible; the downsizer contribution allows up to $300,000 per person into super from home sales, ignoring caps if over 55. Model scenarios to ensure your super meets the Age Pension asset test thresholds.

Retirement

Finally, in retirement (65+), focus on sustainable income. At 60, super withdrawals are tax-free, but plan drawdowns to last 20-30 years. Account-based pensions offer flexibility, with minimum withdrawals starting at 4% under 65, rising to 14% over 95. Centrelink’s Age Pension supplements if assets are below $1,031,000 for couples (homeowner). Diversify income: combine super with investments, part-time work, or annuities for guaranteed streams. Review annually for tax changes, like the proposed higher taxes on large balances over $3 million. Healthcare costs rise, so budget for out-of-pockets despite Medicare.

Throughout all stages, regular reviews with a financial planner are essential. Australia’s super system is world-class, but personal action drives success. Start small, stay consistent, and adapt to life changes for a secure retirement.

To find out more, contact Brooks and Partners for expert financial advice.

This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.