How to retire early
When we imagine retirement – the freedom to travel, pursue our hobbies or simply relax – it’s not surprising that many of us want to start as early as we can. Whether retirement is just ahead or still years away, there are smart steps you can take now to make work optional earlier than you might think.
How much super do I need?
A good place to start is working out how much super you need to retire. Naturally, this depends on the lifestyle you want. There are a few ways to work it out.
ART’s retirement calculator will help you estimate how long your superannuation balance might last in retirement based on your desired annual income.
Another common method is to use estimates from the Association of Superannuation Funds of Australia (ASFA). They show how much the average Australian needs for a modest or comfortable retirement income. Their estimates to the March quarter 2025 are shown below:
| Comfortable lifestyle | Modest lifestyle | Modest lifestyle (renters) | Age pension | |
|---|---|---|---|---|
| Single | $52,383 a year | $33,386 a year | $46,663 a year | $29,874 (including supplements) |
| Couple | $73,875 a year | $48,184 a year | $64,259 a year | $45,037 (including supplements) |
You can see some of the important assumptions ASFA use on their website.
There’s more to consider when planning how much super you need – including how the Age Pension and your superannuation will work together. And while your thoughts may be on travel, it’s important to factor in aged care and healthcare costs as you get older.
Downsizer contributions
Your family home might be full of memories, but it could also be your ticket to early retirement. You could free up a chunk of cash to boost your retirement savings by selling your home and moving to a smaller place.
If you're 55 or over, you might be able to add up to $300,000 to your super tax-free when selling a property you've lived in. If your spouse is also 55 or older, you can add up to $600,000 in total between the two of you under the same downsizer contribution rules.
Manage expenses
Talk to your financial adviser and consider setting up a budget and review your current expenses to find areas where you can cut costs and reduce debt. Small savings in expenses or interest now can add up to big bucks over time.
Supercharge your super
Super is still one of the most tax-effective investments you can make. Generally, you pay 15% tax on super contributions – which for most people is lower than their marginal rate of tax. And your withdrawals are tax-free when you're 60 or older.
Your super is also likely to be one of your biggest assets in retirement, so make it work hard for you. You could do that by making extra contributions to your super to make the most of compounding earnings.
Another good idea is reviewing your super investments and making changes if necessary. Remember, at ART we offer a range of investment options to suit different risk appetites, goals, and retirement timelines.
Transition to retirement
If you’re not quite ready to fully stop work, or you want to spend more time on your side hustle, a transition to retirement (TTR) account might be right for you. Available to people aged 60 to 64, a TTR arrangement lets you reduce the hours you work, without reducing your income.
There are rules around how you can use a TTR, and we recommend you speak to your financial adviser before making any decisions.
What if retirement comes sooner than planned?
Sometimes, life has other plans. You might face an unexpected job loss or health issues that force you to retire earlier than you'd hoped. While it might not be ideal, there are options available if you find yourself in this situation.
It’s a topic our super experts, Anne and Josh, unpack in our Super Insider podcast series. Catch up on their podcast as they discuss important steps to consider, including:
- How to assess your situation
- Steps you can take to get on track
- Options to access your super
- How to better prepare now
Need advice?
Retiring early means your savings need to last longer. It's worth speaking with a financial adviser to look at the numbers and find out your goals. This will help make sure your dream of early retirement is realistic and sustainable.
At ART, financial advice about your account is included as part of your membership.1
Whether you're aiming for an early retirement by choice or preparing for the unexpected, the key is to start planning now.
Any advice given is by representatives of ART Financial Advice Pty Ltd (ABN 50 087 154 818, AFSL 227867), wholly owned by the Trustee. As representatives, they may recommend ART products from time to time. So read the relevant Financial Services Guide at art.com.au/fsg to tell you about that advice and how they’re paid.
This is general information only. It’s not based on your personal objectives, financial situation or needs. So, think about those things and read the relevant Product Disclosure Statement and Target Market Determination at art.com.au/pds before you make any decision about our products. And if you’re still not sure, talk with a financial adviser.
We issue this information and all Australian Retirement Trust products. When we say ‘we’, ‘us’ or ‘the Trustee’, we mean Australian Retirement Trust Pty Ltd (ABN 88 010 720 840, AFSL 228975), trustee of Australian Retirement Trust (ABN 60 905 115 063) (‘the Fund’ or ‘ART’).