Mozo guides

How superannuation can fit into your retirement planning

Two older people stare out at the mountains as superannuation helps them enjoy retirement

Travel and relaxation are commonly associated with retirement, but getting there usually takes some financial planning. 

While your plan might include growing your savings balance to help you achieve part of your retirement goals, superannuation could become the main source of income you depend on in your later years. 

By doing your research and making a solid plan with your super, you can potentially end up with a higher balance and less financial worry later on. So let’s have a look at a few things to consider when planning for retirement.

Determining the age of retirement with super

Man works at his desk, accumulating super for his future retirement.

Some Aussies think about retiring upon reaching the preservation age, as this is usually when you gain access to the money in your super fund. However, there’s no rule that says you can’t retire sooner.

But of course your circumstances can change and your retirement date might move. 

If you’re currently working, crunch the numbers and figure out whether you’ll have received enough employer contributions in your super fund by the time you stop working. As it stands, the super guarantee rate is currently 11% and will be 12% from 1 July 2025. This might help you decide whether to delay or move up your retirement date.

Any potential or current health issues might mean you’ll have to stop work earlier than you intended. Ensuring you have enough super means that you’ll have some cushioning against any medical costs, for example. Alternatively, accessing your super early is a possible avenue but only under very limited circumstances. 

While plans can change, it’s good to get a rough idea of how much you’ll need down the road.

Take stock of super, other income and expenses

A caravan with food and flowers, as income and expenses are taken into account when retirement planning with super.

To determine how much you’ll have in retirement, you might want to take stock of your income and expenses. Most people tend to lean on either super, the aged pension, or both as a form of income. Generally speaking though, the more super you have, the less you’ll probably receive in aged pension. 

While there’s a limit to how much pension you can receive, there isn’t one with super. So it’s worth thinking about how you can grow your super and when the best time to withdraw your super is. 

Then, there are the everyday costs to consider. Here are a few expenses you might need to take into account:

  • Housing. If you have a mortgage, you might think about the amount of super you’ll need to allocate towards paying off your home loan. But if you plan on buying your first home before you retire, you may qualify for the First Home Super Saver Scheme (FHSS) which allows you to purchase the home you intend to live in using super.
  • Food. Whether it’s dinners out or groceries, figuring out how much money you’ll need for food is another cost you might factor into your budget when using super.
  • Transport. You may have to pay for car insurance if you own a car, alongside other costs for the upkeep of your vehicle, so including these costs can give you a more comprehensive picture of your projected spending. 

Make the most of your super - contributions and tax

Calculating taxes payable on super

To get the most out of your super, you may want to hold off on using it as a source of income if you plan to continue working for longer. This is because the super you leave in your fund will continue to bring you investment returns.

Speaking of investments, if having more control over your investments or combining your super with a partner is important to you, setting up a self-managed super fund could be something to consider. Just keep in mind that you’ll need to have a good understanding of how super and tax laws work. 

Alternatively, making voluntary contributions into your super fund could mean having more disposable income in the future. For example, if you make concessional contributions of up to $27,500 in one financial year, your tax rate is generally at 15%. In some cases, this is less than what you might regularly pay at tax time. 

With a non-concessional contribution, you’ll set aside money that has already been taxed and the allowance is typically up to $110,000 per financial year. As an added bonus, it’s possibly tax deductible, too!

As there are a lot of lifestyle aspects and goals to be considered, reaching out to a financial adviser might be beneficial as they can help you sort through your finances and come up with a tailored retirement plan.

Super can be a great asset in retirement. So if you want to know more, pay a visit to our superannuation guides hub and learn about topics ranging from how to withdraw your super to how super funds make investments.

Sophie Wong
Sophie Wong
Money writer

Coming from a background in financial services and criminology, Sophie strives to get others excited about their money journey as they reach their financial goals. She aims to make things like budgeting a fulfilling achievement rather than a dreaded task.