Retirement in Australia does not look the way it did a decade ago. More people are working into their 60s and beyond, and many are planning to stay in the workforce longer than their parents did. That shift changes how long savings need to last and how income is structured once work stops.
Recent data from the Australian Bureau of Statistics (ABS) shows the average age at retirement for all retirees is now 57.3 years, while those who retired in 2024–25 did so at an average age of 63.8 years.
Over the past decade, the average retirement age has risen by around three years. At the same time, the average intended retirement age has climbed to 65.6 years.
Retirement is not always a carefully timed decision.
In 2024–25, 33% of retirees stopped working after reaching retirement age or becoming eligible for superannuation, 13% left due to sickness, injury or disability, and 6% retired after being retrenched or because no work was available. Health-related exits tend to occur at younger ages, which can significantly affect how long savings need to last.
More Australians are working longer than previous generations, but the path to retirement is also becoming less predictable. That combination, in turn, is reshaping how superannuation, income planning and long-term risk need to be managed.
Why working longer changes the planning equation
Working longer can increase income and boost superannuation balances. Employer contributions continue and there is more time to make voluntary contributions. On the surface, that appears to strengthen retirement readiness.
But a later retirement does not remove financial pressure. It reshapes it.
A longer working life does not necessarily shorten retirement. As life expectancy rises, many people may still spend decades outside the workforce – which they will need to fund. To complicate matters, health costs tend to increase with age. The likelihood of aged care support rises. The investment environment remains uncertain.
The challenge is no longer simply building a larger balance. It is ensuring that the balance can generate sustainable income.
From saving to spending: a structural shift
More than 250,000 Australians are expected to retire in the next year, with a further 2.5 million over the coming decade. This demographic shift is moving the superannuation system from focusing mainly on building balances to managing income, aged care and wealth transfer.
Retirees are increasingly relying on superannuation as their primary income source. According to Australian Bureau of Statistics data, the proportion using super as their main income rose from 20% in 2014–15 to 28% in 2024–25. At the same time, the age pension remains the most common income source, and financial security continues to drive retirement decisions.
This shift changes the focus of planning. It is no longer just about growing the balance. It is about converting super into reliable income, managing withdrawals and preserving capital where possible.
For households in areas such as Southport, Hope Island or Burleigh Heads, significant home equity may exist alongside uncertainty about how to structure retirement income. Wealth on paper does not automatically translate into cash flow.
What this means for income planning
Understanding how much income is required is critical. The ASFA Retirement Standard estimates that a comfortable retirement currently costs $54,840 a year for singles and $77,375 for couples who own their home, based on the December quarter 2025 figures. These figures provide a benchmark, but personal circumstances vary widely.
Inflation, interest rates and investment returns also influence outcomes. Higher inflation reduces purchasing power. Market volatility can affect balances near retirement. Interest rate movements change returns on cash and fixed income assets.
These risks cannot be set and forgotten. They require regular review and adjustment as circumstances evolve.
Planning strategies at different life stages
Different stages of life call for different decisions.
Those still in the workforce
Individuals who are still working can review contribution levels and consider whether salary sacrifice or after-tax contributions are appropriate. Investment allocations should reflect both time horizon and risk tolerance. Career transitions, such as moving to part-time work in later years, also require modelling to ensure super and savings remain on track.
Near retirees
People within seven years of retirement often need to shift focus from growth to income planning. That includes estimating how long retirement may last and identifying reliable income streams. Health costs and potential lifestyle changes should be factored into projections. Queensland recorded the largest increase in retirees between 2022–23 and 2024–25, highlighting how relevant this issue is locally.
Retirees
Those already retired face the challenge of making savings last. Longevity risk is real. Managing withdrawals, maintaining diversification and ensuring sufficient liquidity for unexpected expenses are central considerations. Aged care can become a major financial decision, particularly as reforms have increased means tested co-payments and pressure on the system continues.
Retirement planning increasingly overlaps with estate planning. Up to $5.4 trillion is expected to transfer between generations over the next two decades. Clear structures and documentation can help reduce complexity for families.
If rising retirement ages and longer life expectancy are influencing how you think about income, superannuation and long-term security, contact RFS Advice to discuss how your retirement strategy may be structured to remain aligned with your goals over time.
Frequently asked questions
The average retirement age of all retirees is 57.3 years, while those who retired in 2024–25 did so at an average age of 63.8 years, according to the Australian Bureau of Statistics.
The ASFA Retirement Standard estimates $54,840 per year for singles and $77,375 for couples who own their home, based on December quarter 2025 figures.
Longer life expectancy, financial security concerns and changing workforce patterns contribute to the upward trend, although many people still leave the workforce earlier than planned.
Inflation reduces purchasing power over time. If retirement income does not grow in line with living costs, savings may be depleted more quickly. Investment and income strategies should account for this risk.
Longevity risk refers to the possibility of outliving your savings. As Australians live longer, income planning must consider how to fund potentially decades of retirement.
General advice warning:
The information and any advice provided in this article has been prepared without taking into account your objectives, financial situation or needs. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things.
