You're 60, or close enough to it. The annual super statement lands, you look at the number, feel a small twist, and file it away. Behind that twist is a question you've never quite answered out loud: could you stop now? And if you could, what would it actually cost you to keep going until 67?
It's a fair question, and it deserves a better answer than "work as long as you can". Here's what the seven years between 60 and 67 really involve.
What changes at 60, and what changes at 67
These are two different doors, and people often confuse them.
Sixty is about your own money. If you were born after 30 June 1964 — which covers everyone turning 60 now — your preservation age is 60, according to the Australian Taxation Office. Reach 60 and meet a condition of release, such as retiring from the workforce, and your super becomes available to you. Payments from a taxed fund after 60 are generally tax free, which is why so many people treat that birthday as the finish line.
Sixty-seven is about the government's money. Age pension age is 67, and Services Australia says there are no plans to change it. Nothing you do at 60 brings that date forward.
So between 60 and 67 you are, by definition, funding yourself. That's the gap the whole decision turns on.
What seven more years of work really does to the balance
Take someone turning 60 with $400,000 in super, earning $100,000 a year. Their employer pays super guarantee contributions of 12% of salary (the rate set by the ATO for 2026-27), which is $12,000 a year, or about $10,200 after the 15% contributions tax. Assume the fund earns 6.5% a year after fees and tax — an assumption, not a promise.
Work to 67 and never add a cent of your own: the balance grows to roughly $708,000.
Retire at 60 instead and draw $50,000 a year to live on: by 67 there's roughly $195,000 left.
That's a gap of about half a million dollars at the same birthday. It isn't magic. It's three forces pulling the same way — seven more years of contributions, seven years of growth on a balance you haven't touched, and seven years of not withdrawing.
If you also put money in yourself, the gap widens. The concessional (before-tax) contributions cap is $32,500 in 2026-27, and the ATO allows you to carry forward unused cap amounts from the previous five years if your total super balance was under $500,000 on 30 June. For someone who had years out of the workforce, that can mean a much bigger deductible contribution than they expect.
But the age pension pushes back the other way
Here's the part the "just work longer" advice tends to skip. Drawing down your super between 60 and 67 reduces the assets you'll be assessed on when you reach pension age — and a smaller assessable balance can mean a bigger pension.
The current maximum age pension, including the pension and energy supplements, is $1,178.70 a fortnight for a single person and $1,777.00 a fortnight for a couple combined — about $30,600 and $46,200 a year. Above the assets free area, the Department of Social Services reduces the payment by $3 a fortnight for every $1,000 of assessable assets. Spend $100,000 of super before 67 and you could be roughly $300 a fortnight better off on the pension, all else being equal.
That is not an argument for burning through your super. It is an argument for doing the sums on your own numbers rather than assuming more is always better. For people with modest balances, the pension does a lot of the heavy lifting; for people well above the cut-off, their own money does nearly all of it. The hardest territory is the middle.
Working past 67 doesn't rule out the pension either. The income test free area is $218 a fortnight for a single and $380 for a couple, and the Work Bonus sets aside a further $300 a fortnight of employment income, with an unused balance that can build up to $11,800. A day or two a week often costs far less pension than people fear.
The things the spreadsheet can't tell you
Seven years is a long time at this stage of life, and the numbers above assume everything goes to plan.
Your health may not give you the choice. Neither may your employer — plenty of people who intended to work to 67 were made redundant at 58 and never found an equivalent role. If your plan only works when you work to 67, it isn't really a plan; it's a hope.
There's also the other side. Some people retire at 60 with enough, and spend the next seven years in good health doing the things that get harder later. That is a legitimate answer, not a financial failure. The question isn't just "can I afford to stop?" but "what am I buying with the years I keep working?"
And if you have a partner, this is a joint decision. Different ages, different balances and different pension timing mean one of you may be better off stopping first.
If you're behind, or if you can't wait
The choice isn't binary. Between "full-time at 67" and "finished at 60" sits the option most people actually take: fewer days, less pressure, some income still coming in. A transition to retirement income stream lets you draw on your super while still working, topping up your pay without stopping altogether.
Three things worth checking this month, whichever way you lean:
- Your investment option. A balance you won't touch for seven years is invested differently from one you'll start spending next year.
- Your insurance premiums inside super. They can quietly cost thousands a year at this age, for cover you may no longer need.
- Your binding death benefit nomination. Your will does not control your super.
If the numbers say you're short, that is information, not a verdict. Your 60s are the years when contributions are largest, mortgages are often finished and compounding still has time to work. Knowing where you stand at 60 is worth far more than guessing at 66.
If you want to work through this decision properly — the pension tests, the drawdown choices, and how the two interact — Retirement Made Simple (6th Edition) by Noel Whittaker takes you through it in plain English, updated for the current financial year. It's $19.95, available in PDF and EPUB, and you buy direct from the author.
This article is general information only and doesn't take account of your personal circumstances. Figures are current at time of writing and change each financial year. Consider seeking advice before acting.