Dreaming of early retirement? Here are six steps to help you get there

Many Australians today expect to be working well after they would like to retire, new research from CFS shows. 

On average, Australians would like to retire at 62 years of age, according to the 2026 Rethinking Retirement report, which tracks how Australians think and behave when it comes to retirement. 

But most believe 66 is a more realistic retirement age – four years later than we would like.

We are already retiring later than we used to, according to Australian Bureau of Statistics data, which showed 156,000 people aged 45 years and over retired during 2024-25, at just under 64 years – over six years later than the average age at retirement of all retirees, which is 57 years².

For Australians with a sizeable sum in super, you’ve already done much of the heavy lifting. 

The good news is that retiring early may be more about taking the practical steps now that can put you in a position to be able to retire when you want to. 

Below are six steps that could bring you closer to early retirement:

Before you run the numbers, define the life you want for yourself in retirement. Everyone’s needs and desires in retirement are different – and what it might cost to fund them may also differ.

Ask yourself:

• How old are you in your ideal retirement picture?
• Where are you living (same place, coastal retreat, somewhere else entirely)?
• What are you doing (travelling, spending time with family, volunteering, a passion project, working part-time)?

Determine how much income you would need each year, and how long your money might need to last.

The sooner you can translate an approximate goal into a measurable one, the sooner you’ll be able to determine the steps that could make it a reality.

Be realistic about your needs, and factor in things like healthcare costs, which tend to rise in retirement, children who may need to live at home for longer, and contingencies in case plans change.

Tip: Not all retirement years cost the same, as many people tend to reduce expenditure after age 75.

Estimate the value of assets you’ll need when you retire to generate the income you’re looking for. People often consider drawing 4%-5% a year of their super balance, but this will depend on the income you need, and any other sources of income available to you, such as part-time work.

Financial advice can be a fast track to retiring early: on average, 51% of Australians feel prepared for retirement, the 2026 Rethinking Retirement report shows, but that number jumps to 77% among those who have received financial advice. 

Key things to include in your plan for retiring early are:

• your target early retirement date.
• your income needs.
• super and investment goals, and realistic strategies for getting there.
• other sources of income.
• tax considerations.
• contingencies if markets or health circumstances change.

You can use our retirement calculator to help you understand the effect of different strategies, such as:

• lump sum or salary sacrifice contributions to your super.
• other contribution types, such as downsizer contributions and spouse contributions.
• income from investments or part-time work.
• Age Pension income, if you’re eligible, from age 67.

Also consider how and when you might withdraw your super, such as converting it to an income stream in retirement in the form of a tax-free pension, or as a lump sum.

If you’re close to retirement, a market downturn just when you’re starting to draw on your super can affect how long your super will last – this is known as sequencing risk.

It’s important to have a strategy for this and other contingencies – for example, keeping a couple of years of income in low-risk assets, such as cash-based or conservative investment options that you can draw your income payments from instead of needing to sell any units that have declined in value if there is a downturn.

This could also allow you to move ahead with retiring at your chosen time, rather than waiting for markets to improve.

For many people who are used to working full-time, an achievable version of retiring early is to retire from full‑time work, rather than from all work.

This is where reducing your work hours, shifting into consulting, or focusing on a side venture that provides meaning and cash flow might help. 

If you’re 60 or over, a Transition to Retirement (TTR) pension may also be worth considering – it can enable you to receive payments from your super while reducing your hours. 

The best advice about retiring early may not be financial, and it applies at whatever time you retire: it’s just as important to invest in your health, social connection and sense of purpose as it is to invest in your financial future.

This may mean staying connected with your personal networks, developing new interests or hobbies, learning new skills, volunteering, travelling, following a long-term passion, or pursuing other interests that take your fancy. 

Best of all: in retirement, you get to choose how to spend your time. Or as one retiree gleefully put it: “Nothing’s compulsory.”