In 2024-25, 156,000 new retirees joined the Australians already enjoying their post-work years, bringing the total number of retirees up to 4.5 million.

For those still looking forward to retirement, there’s plenty to think about, such as what hobbies to take up, where to travel, and which bucket list items to tick off first. Before the retirement party, though, it’s also important to do some planning around superannuation. There’s a lot more to super than just turning 65 and cashing out.

So what should future retirees learn about their super before finishing work? The first point to know is that there’s plenty of advice available. We turned to the super fund expert Andrew Jewell, the executive manager of financial advice and education with First Super. With his expertise, here are five more things you should know about your super before retiring.

An illustrated graphic indication the following stat: In 2024-25, 156,000 people aged 45 years and over retired, with an average age of 63.8 years.Estimate how much super you’ll need to retire

Retirement, like working life, looks different for all of us. With everyone having such varying lifestyles, plans and expenses, it’s hard to generalise about how much super people will need when they retire.

The Association of Superannuation Funds of Australia (ASFA) offers a guide, suggesting how much retirees would need for “modest” and “comfortable” retirements. This can be helpful, but you can get more accurate figures, Jewell says, by using retirement calculators or super health checks.

“They take the person’s superannuation situation now, with their partner, where applicable, and they project that out and say: if you’re this age and you want this level of income, this is how long your super is going to last,” Jewell says. Many calculators and health checks also factor in the age pension.

An illustrated graphic prompting: Use a retirement calculator to help you arrive at an estimate.Understand how a transition to retirement strategy works

Transition to retirement (TTR) is a way to access your super before retirement. It becomes an option after you’ve hit the preservation age of 60 (for people born on or after 1 July 1964). Pre-retirees can use a TTR pension as a tax-free income stream – either to work less and earn the same, or to boost their regular earnings, or as a way to supplement their wages while they also salary sacrifice to increase their super balance. Jewell says many people are also using TTR pensions to pay off debt before they retire.

“Most members want to retire debt free, and people are retiring with debt more and more nowadays,” Jewell says. “If people are considering using the TTR strategy for that particular approach, it’s best to get some financial advice around it.”

Whichever TTR strategy you like the look of, Jewell says it’s best to run your idea by a professional, or use a free online tool, such as the ISA TTR calculator. “A lot of people like the idea [of TTR], but it comes down to a basic question: how much do I open the account with, and if appropriate, how much do I contribute back into my super account?” Jewell says. “And that’s where advice comes into play.”

An illustrated graph animates behind the heads of a cartoon couple looking at a computer together.Get into the numbers: taxes and pay

Tax isn’t just something to think about during our working lives; it can affect us in retirement, too. Depending on where you are in your retirement journey and how you intend to retire and draw down your super, there are plenty of potential tax scenarios.

“Our members are quite surprised to learn that once they’ve moved into the [superannuation] pension account, the earnings are tax free,” Jewell says.

“The other one they really don’t necessarily give consideration to is that the age pension is taxable income.”

Jewell also points out that super taken as a lump sum and put into a bank savings account can trigger income tax even in retirement due to interest earnings, and that people may be eligible for the seniors and pensioners tax offset, which can reduce their income tax. As always, the key to navigating the complexity is to speak with a professional.

Research your options for combining super and the age pension

Super and the age pension aren’t mutually exclusive; they’re designed to work together. But working out how to combine them to get the best result can be complicated. Centrelink uses assets and income tests to calculate how much age pension you are entitled to, and your super (as an asset, or as income) is factored in to those tests. To get the most out of the age pension while still drawing super, take a look at tools such as the ISA age pension calculator, and tap into the experience of industry experts.

“It’s about getting your head around the income test and the asset test,” Jewell says of combining super and the age pension. “If people want advice on their age pension only, we refer a lot of our members to Centrelink and get them to talk to a financial information services officer. It’s a free service.”

You don’t have to figure it out alone – seek super financial advice

From online super calculators to Centrelink and super fund experts, there’s a huge range of resources out there to help you understand your super. If you have questions or concerns about super and retirement, Jewell says those resources are worth leaning on, even if you don’t think you have a high enough balance.

“People think they’ve got to have a large amount of money, like a million dollars, before they get financial advice,” Jewell says. “They don’t realise $100,000 is enough.”

Get your head around retirement at retiringbasics.com today.

The information provided in this article is of a general nature only and does not constitute financial or other advice. It is important to consider personal objectives, financial situations or particular needs when making financial decisions.