It’s 3am.

You’re lying in bed, wide awake, doing the math again. Your super balance. Your mortgage. Your age. The number of years until retirement.

And that nagging question: “What if I run out of money?”

You’ve done okay. You’ve worked hard. You’ve saved. You own your home (or close to it). Your super balance isn’t terrible.

But somehow, you still can’t shake this creeping anxiety that maybe—just maybe—it won’t be enough.

Welcome to FORO: Fear of Running Out.

And if you’re feeling it, you’re not alone. Not even close.

What Is FORO (Fear of Running Out)?

FORO is the persistent, nagging anxiety that your money won’t last as long as you do.

It’s a real, pervasive anxiety that affects thousands of Australians in their 50s and 60s. The fear that no matter how much you’ve saved, you’ll outlive your money.

That you’ll be 82, living on baked beans and two-minute noodles, wondering where it all went wrong.

That you’ll become a burden on your kids.

That your “golden years” will be spent worrying about every electricity bill, every dinner out, every unexpected car repair.

FORO is the feeling that you’re one market crash, one health crisis, or one bad decision away from financial disaster.

And here’s the thing: FORO doesn’t discriminate based on your bank balance.

I’ve met people with $800,000 in super who are terrified they don’t have enough. And I’ve met people with $300,000 who sleep like babies.

FORO isn’t about the numbers. It’s about certainty. Or rather, the lack of it.

What FORO Looks Like in Real Life

The Couple Who Can’t Pull the Trigger

Peter and Anne, both 64, living in Balmain. $850,000 in super. Home paid off. Both still working full-time in jobs they don’t particularly enjoy.

They came to see me because Peter had been telling Anne “just one more year” for the past three years. Anne was ready to retire. Peter was terrified.

“What if something happens?” he kept saying. “What if the market crashes? What if we need medical care? What if we live to 95?”

When I showed them their numbers – that they could comfortably generate $65,000/year in retirement income plus a part Age Pension, totaling $80,000+ annually – Peter went quiet.

“So we could have retired two years ago?”

Yes. They could have.

FORO had cost them two years of their lives. Years they can’t get back.

“Your Retirement Number Isn’t What You Think”

The Retiree Living Like a Pauper

Margaret, 68, widowed, living in Rozelle with $720,000 in super.

She came to me because her adult daughter was worried. Margaret was rationing her groceries, refusing to turn on the heater in winter, and declining family dinners because “I can’t afford it.”

She had three-quarters of a million dollars sitting in her super account.

When I asked why she was living this way, she said: “I’m too scared to touch it. What if I run out?”

Margaret’s super could sustainably generate $40,000-$45,000 per year in income, plus she qualified for a part Age Pension. Her total retirement income should have been around $60,000 annually.

Instead, she was living on about $30,000 because FORO had convinced her that any spending would lead to catastrophe.

Why FORO Hits Hardest in Your 50s and 60s

When you’re 30, retirement feels like a distant concept. You’ve got time. Compound interest is your friend. Market downturns are just buying opportunities.

But somewhere in your 50s, everything shifts.

Retirement isn’t “someday.” It’s soon. Maybe 10 years. Maybe 5. Maybe you’re already there.

Suddenly, you don’t have time to “ride out” market volatility. You can’t just work another decade to make up for that expensive mistake. The finish line is visible, and you’re wondering if you’ll make it.

And that’s when FORO really digs in.

Here in Balmain and the Inner West, I see it all the time:

• The 58-year-old executive who postpones retirement “just one more year” because she’s not 100% certain
• The couple who own a $2.5 million terrace but are terrified to spend a cent
• The teacher who’s been dreaming of traveling Europe but can’t pull the trigger because “what if we need that money later?”

They’re all successful, responsible people. And they’re all paralyzed by FORO.

The Three Types of FORO

Not everyone experiences FORO the same way. Here are the three most common versions I encounter:

Type 1: “I Don’t Have a Big Enough Number” FORO

This is the most common type. You’ve read articles saying you need $1 million, $1.5 million, maybe $2 million to retire comfortably. You look at your super balance and think: “I’m nowhere close.”

So you keep working. You delay retirement. You stress about every market dip eating into your balance.

The Problem: You’re measuring the wrong thing. (More on this in a minute.)

Type 2: “What If I Live Too Long?” FORO

You’ve done the math. Your super should last until you’re 85, maybe 90. But what if you live to 95? 100? Your dad lived to 93. Your mum’s 88 and still going strong.

The longer you might live, the more anxious you get.

The Problem: You’re not factoring in the Age Pension safety net and income strategies that last for life.

Type 3: “What If Something Goes Wrong?” FORO

Markets crash. Health fails. Aged care costs skyrocket. Your daughter needs help with a house deposit. Your son loses his job.

You lie awake thinking about all the things that could derail your retirement plan.

The Problem: You’re focused on worst-case scenarios instead of creating a resilient plan that can handle them.

The Real Cost of FORO

Here’s what most people don’t realize: FORO is expensive.

Not just emotionally. Financially.

When you’re paralyzed by fear, you make poor decisions:

You work longer than necessary

• That’s time you’re not getting back
• That’s travel you’re not doing while you’re healthy
• That’s years spent stressed instead of enjoying life

You under-spend in retirement

• You have the money, but you’re too scared to use it
• You skip the trip to Italy “just to be safe”
• You live below your means when you don’t have to

You make overly conservative investment choices

• You dump everything into cash because it feels “safe”
• Inflation quietly erodes your purchasing power
• You miss out on growth that would have actually reduced your FORO

You delay getting professional advice

• Because spending $660 feels risky when you’re already anxious
• So you continue guessing, worrying, and losing sleep
• While a clear plan could have eliminated 80% of your stress

One of my clients—I’ll call her Margaret—worked an extra four years because of FORO. She had $520,000 in super, owned her Balmain home outright, and thought she needed to hit $700,000 before retiring.

When we finally sat down and ran the actual numbers, we discovered she could have retired comfortably at 63.

She was 67 when we met.

That’s four years she’ll never get back. Four years of stress, commuting, and postponing the travel she’d been dreaming about. Four years lost to FORO.

Why FORO Is So Common (And Why It’s Not Your Fault)

You’re not irrational for feeling this way. There are real reasons FORO is so prevalent:

1. Retirement Used to Be Simpler

Your parents probably had a defined benefit pension. They worked for one company for 40 years, retired at 60, and got a guaranteed income for life.

You? You’ve had 5 different jobs. Your super is spread across multiple funds. You’re responsible for making it last. The burden is entirely on you.

No wonder you’re anxious.

2. We’re Living Longer

Life expectancy keeps increasing. Retiring at 65 might mean funding 25-30 years of living expenses. That’s a long time. And longer than your parents’ retirement was.

3. The Media Loves Scary Retirement Stories

Every news cycle brings another doom-and-gloom article: “Most Australians underprepared for retirement!” “Retirees facing poverty!” “You need $1.5 million just to scrape by!”

This stuff is designed to get clicks, not provide useful guidance. But it fuels FORO like petrol on a fire.

4. Super Fund Statements Are Designed to Scare You

Every quarterly statement shows your balance. And when markets drop 10%, that number goes down. Seeing “$480,000” become “$432,000” overnight triggers panic.

What the statement doesn’t show is your income potential—which is what actually matters in retirement.

5. Everyone’s Advice Contradicts

One mate says you need $2 million. Another retired on $400,000 and seems fine. Your super fund’s calculator says $950,000. ASFA says $690,000.

No wonder you’re confused and anxious.

The Antidote to FORO

Here’s the good news: FORO is fixable.

Not with positive thinking or “just relax” advice. But with clarity.

FORO thrives in uncertainty. It dies in the light of actual numbers.

When you know—really know—whether you’ll have enough, the anxiety evaporates.

Here’s what that looks like in practice:

Step 1: Stop Measuring the Wrong Thing

Your super balance is not your retirement income.

Say that again: Your super balance is not your retirement income.

Obsessing over whether you have $500K or $800K misses the point. The question isn’t “how big is the tank?” It’s “will this generate enough fuel for the journey?”

What matters is: Can you generate $60,000 (or whatever you need) per year, every year, for as long as you live?

That’s a completely different question.

This shift from “net worth” to “income” is exactly what I help Balmain residents understand. Your retirement number isn’t what you think it is—it’s not about hitting some magic lump sum figure.

It’s about building reliable income streams that last.

Step 2: Calculate Your Actual Income Need

Not ASFA’s number. Not some article’s number. Your number.

What will you actually spend each year in retirement?

For most Balmain couples I work with, it’s between $60,000 and $80,000. For singles, $40,000 to $55,000.

This includes:

• Rates, bills, insurance
• Groceries, dining out
• Travel (at least one decent trip per year)
• Healthcare
• Helping the kids or grandkids
• Living your actual life

Once you know your income need, FORO loses half its power.

Step 3: Map Your Income Sources

This is where the magic happens. Most people think retirement income = super drawdowns. But it’s actually:

Super drawdowns + Age Pension (if eligible) + part-time work (if you want) + investment income + other assets

When you add all this up, you often discover you’re way closer than you thought.

Step 4: Stress Test It

Okay, your plan works if everything goes smoothly. But what if:

• Markets crash in year two?
• You live to 95?
• You need aged care at 82?
• One of you passes away early?

A good plan survives these scenarios. And when you see that it does, FORO loses its grip.

Step 5: Build in Flexibility

Rigidity creates anxiety. Flexibility creates confidence.

Your retirement plan shouldn’t be: “I must withdraw exactly $45,000 per year forever.”

It should be: “I’ll start at $50,000, adjust if markets tank, spend more in my healthy 60s, and ease back in my 80s if needed.”

This kind of flexible planning dramatically reduces FORO.

Real Example: How We Eliminated David’s FORO

David, 62, came to see me with classic FORO.

He had:

• $580,000 in super
• Home in Rozelle (worth ~$2.2M, paid off)
• $40,000 in savings
• A part-time consulting gig earning $20,000/year

He thought he needed to work until 67 to “be safe.”

Here’s what we discovered:

His actual annual income need: $68,000

His retirement income sources:

• Super drawdowns: $30,000/year (starting conservatively at 5%)
• Age Pension: $22,000/year (part pension, as he qualified)
• Part-time consulting: $16,000/year (because he enjoyed it, not because he needed it)

Total: $68,000

He could retire now.

When I showed him the numbers, the relief was visible. His shoulders dropped. He smiled for the first time in the meeting.

“I’ve been losing sleep over this for two years,” he said. “And I was already okay?”

Yes. He was already okay.

FORO had been costing him sleep, stress, and peace of mind for nothing.

“Want to discover your own retirement readiness? Book a One Page Financial Plan session.”

What If You’re Not Okay?

Fair question. What if you run the numbers and discover there’s actually a gap?

That’s not a reason to panic. It’s a reason to plan.

If your income sources add up to $50,000 but you need $65,000, you’ve got options:

• Delay retirement 2-3 years and boost super contributions
• Adjust your spending expectations slightly
• Keep working part-time for a few years
• Consider downsizing to free up capital
• Look at investment strategies to increase income

The point is: knowing the gap is better than guessing.

Because once you know the gap, you can close it. And once you can close it, FORO disappears.

The Psychology of FORO: It’s Not Just About Money

Here’s something I’ve learned after 15+ years working with pre-retirees: FORO is rarely just about the money.

It’s about:

• Control: Retirement means losing the safety net of a regular paycheck
• Identity: If you’ve been “David the engineer” for 40 years, who are you in retirement?
• Purpose: Work gave you structure and meaning. What replaces that?
• Mortality: Retirement planning forces you to think about how long you’ll live

These are big, existential questions. No wonder people obsess over super balances—it’s easier than confronting this stuff.

But here’s the thing: a good financial plan doesn’t just give you numbers. It gives you permission to move forward.

When you know your money will last, you can stop worrying about money and start thinking about the life you want to live.

Moving from Fear to Clarity

FORO keeps you stuck. Clarity sets you free.

You can spend the next five years:

• Lying awake at night
• Postponing retirement “just to be safe”
• Second-guessing every financial decision
• Living in anxiety

Or you can spend 90 minutes getting actual answers.

I’m not saying a financial plan is magic. I’m saying confusion breeds fear, and clarity breeds confidence.

When you know your numbers—really know them—FORO loses its power.

Your Next Step

If you’re reading this and thinking “Yes, this is exactly how I feel”—you’re not alone.

And you don’t have to figure this out by yourself.

The One Page Financial Plan is designed specifically for people experiencing FORO. In one 90-minute session, we’ll:

• Calculate your actual annual income need (not some generic benchmark)
• Map all your income sources (super, Age Pension, investments, part-time work)
• Stress test your plan against worst-case scenarios
• Show you exactly where you stand—and what adjustments (if any) you need to make

No 50-page report. No jargon. Just a single page showing you the truth about your retirement readiness.

One Page Financial Plan Investment: $660 (inc. GST) Next Step: Book a free 90-minute discovery meeting

Email: adam@suncow.com.au
Phone: 0418 785 200

Based in Balmain, working with pre-retirees across the Inner West and Sydney.

Stop losing sleep. Start getting answers.

Frequently Asked Questions

Q: Is FORO a sign I’m not financially ready to retire?

Not necessarily. FORO often has nothing to do with your actual financial situation. Many people with plenty of money still experience it. The key is distinguishing between rational concern (you genuinely need more) and irrational anxiety (you’re already fine but don’t know it yet).

Q: How do I know if my FORO is justified?

Run the actual numbers. If your income sources cover your expenses in multiple scenarios (normal years, market crashes, living to 95), your FORO is likely unfounded. If there’s a real gap, at least you know what you’re dealing with.

Q: Can FORO ever go away completely?

For most people, yes. Once they have a clear, tested plan and see it working for 12-24 months, the anxiety fades significantly. Some low-level awareness remains (which is healthy—you should monitor your finances), but the paralyzing fear disappears.

Q: What if I can’t afford a financial planner?

The One Page Financial Plan is $660—less than most people spend on a weekend away. And the cost of not getting clarity is potentially years of unnecessary work or chronic anxiety. But if that’s genuinely out of reach, start with free resources like Moneysmart.gov.au and the Age Pension calculator at servicesaustralia.gov.au.

Q: My partner doesn’t have FORO but I do. Is that normal?

Completely normal. People have different risk tolerances and relationships with money. The important thing is getting on the same page about your actual financial situation so you can make decisions together.

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About the Author

Adam Carey is a fee-for-service financial planner based in Balmain, specializing in retirement income planning for people in their 50s and 60s. No commissions. No jargon. Just straight talk about your financial future.

If FORO is keeping you up at night, let’s talk.

Email: adam@suncow.com.au
Phone: 0418 785 200

Here’s the conversation I have at least three times a week with Balmain locals:

Them: “I’ve got $650,000 in super. Is that enough to retire?”

Me: “Enough for what?”

Them: “You know… to retire. To live on. Is it enough?”

Me: “How much do you need to live each year?”

Them: “Um… I’m not sure. Maybe $60,000? $70,000? I haven’t really worked it out.”

And there’s the problem.

You’re stressing about whether you have “enough” saved, but you haven’t actually calculated what “enough” means. You’re asking if $650,000 is sufficient without knowing what it needs to be sufficient for.

It’s like asking “Is 50 litres of petrol enough?” without saying where you’re driving.

Let me show you how to actually calculate your real retirement income – the number that determines whether you can retire comfortably or need to keep working.

Why Income Matters More Than Net Worth

Your super balance is just a number on a screen. What matters is: How much can that balance generate in annual income?

Two people with $700,000 in super can have wildly different retirement experiences depending on how their money is invested:

Person A: Invested in growth assets, generating $25,000/year in income. They’ll need to sell assets constantly to make up the shortfall.

Person B: Invested in income-producing assets, generating $45,000/year. Combined with Age Pension, they’ve got $65,000/year without selling anything.

Same super balance. Completely different income. Completely different retirement.

“Your Retirement Number Isn’t What You Think”

So let’s stop obsessing over your total balance and start calculating the only number that actually matters: Your annual retirement income.

The 4-Step Retirement Income Calculation

Here’s the framework I use with every Balmain client. It takes 15 minutes and gives you absolute clarity on whether you can retire or what needs to change.

Step 1: Calculate Your Annual Living Costs

First, figure out what you actually spend. Not what you “should” spend. Not what ASFA says. What do YOU actually need to live comfortably?

Essential expenses:

• Housing (rates, insurance, maintenance – or rent if not a homeowner)
• Utilities (electricity, gas, water, internet, phones)
• Food and groceries
• Transport (car costs, public transport, or both)
• Health (insurance, prescriptions, specialists)
• Insurance (car, home, health, life if applicable)

Lifestyle expenses:

• Dining out and entertainment
• Travel (realistic estimate – not aspirational)
• Hobbies and recreation
• Gifts and family support
• “Life happens” buffer (10% of total for unexpected costs)

Example – Sarah and John, Balmain homeowners:

• Housing (rates, insurance, maintenance): $6,500
• Utilities and internet: $4,200
• Food and groceries: $12,000
• Transport (one car): $6,000
• Health and insurance: $8,500
• Dining and entertainment: $8,000
• Travel: $6,000
• Gifts and family support: $3,000
• Buffer (10%): $5,400

Total annual living costs: $59,600

That’s their number. Not ASFA’s number. Not some internet calculator’s number. Theirs.

Step 2: Calculate Your Super Income

Next, figure out how much annual income your super can reliably generate.

For income-focused portfolios (dividend shares, income funds, rental properties), a reasonable sustainable income rate is about 6% of your super balance.

Formula: Super Balance × 0.06 = Annual Super Income

Sarah and John’s calculation:

• Combined super: $650,000
• Income rate: 6% (invested in income-producing assets)
• Annual super income: $650,000 × 0.06 = $39,000/year

Important note: This assumes your super is invested in income-producing assets (dividend-paying shares, income funds, etc.). If your super is mostly in growth assets, your sustainable income will be lower – maybe 3-4%. This is why investment strategy matters enormously.

Step 3: Add Your Age Pension Income

Most Australians ignore the Age Pension when planning retirement. This is a huge mistake.

Even a part Age Pension can add $15,000-$20,000 to your annual income. That’s like having an extra $300,000-$400,000 in super generating income – except it’s guaranteed, indexed to inflation, and paid for life.

Use the government’s Age Pension calculator to estimate your entitlement:

Age Pension calculator

Sarah and John’s Age Pension:

• Combined super: $650,000
• Home (not counted in assets test): Owned outright
• Other assets: Minimal
• Age Pension entitlement: Approximately $18,000/year (part pension)

Step 4: Calculate Your Total Retirement Income

Now add it all up:

Super Income + Age Pension + Any Other Income = Total Annual Retirement Income

Sarah and John’s total income:

• Super income: $39,000/year
• Age Pension: $18,000/year
• Part-time consulting (optional): $0

Total annual retirement income: $57,000/year

The Gap Analysis: Can You Retire or Not?

Now comes the moment of truth. Compare your annual costs to your annual income:

Sarah and John’s gap analysis:

• Annual living costs: $59,600
• Annual retirement income: $57,000
• Shortfall: $2,600/year

That’s it. That’s the gap. Not some vague anxiety about “not having enough.” An actual, specific number: $2,600/year.

And here’s the beautiful thing: When you know the exact gap, you know exactly what needs to change. Sarah and John don’t need to work another five years. They don’t need to “save more.” They need to find $2,600/year – which they can do by:

• Adjusting their lifestyle slightly (maybe $4,000 less on travel)
• Working one day a week for the first two years ($6,000/year part-time income)
• Contributing an extra $50,000 to super before retiring (adds $3,000/year income)

All of these are manageable. None require working another decade. Because the gap is tiny – they just didn’t know that until they ran the numbers.

Why This Calculation Changes Everything

When I walk clients through this four-step process, something shifts. The anxiety eases. The fear of the unknown disappears.

Why? Because you’ve replaced vague worry with specific numbers.

Before: “Do I have enough? I don’t know. Maybe? I hope so?”

After: “I need $62,000/year. I can generate $58,000/year. I have a $4,000 gap. Here are three ways to close it.”

See the difference? One is FORO (Fear Of Running Out). The other is a solvable problem.

“Your Retirement Number Isn’t What You Think”

Real Balmain Example: Two Very Different Outcomes

Let me show you how powerful this income calculation is with two real examples from my Balmain clients (names changed).

Client 1: David, 62, $850,000 super

David came to me convinced he needed to work until 67. He’d read online that you need $1 million to retire, and he was still $150,000 short.

We ran the income calculation:

• Annual costs: $68,000
• Super income (6%): $51,000
• Age Pension (part): $12,000
• Total income: $63,000
• Gap: $5,000/year

Solution: David could easily cover that $5,000 by doing one day a week consulting for the first few years of retirement. He retired at 63, not 67. Four extra years of freedom – all because he calculated income instead of obsessing over his balance.

“The $1 Million Retirement Myth”

Client 2: Maria, 59, $520,000 super

Maria thought she was nowhere near ready to retire. Her super balance was “only” $520,000 – well short of that mythical million.

Her calculation:

• Annual costs: $52,000 (owns home outright, modest lifestyle)
• Super income (6%): $31,200
• Age Pension (part): $22,000
• Total income: $53,200
• Surplus: $1,200/year

Maria had enough. Right now. Not in 8 years. Today.

She thought she needed another $480,000. She actually needed $0. The calculation showed her the truth.

The Action Steps: What to Do With Your Numbers

Once you’ve run your own calculation, you’ll land in one of three scenarios:

Scenario 1: You have a surplus (income exceeds costs)

Congratulations – you can retire now if you want to. Your job is to protect and maintain your income sources. Don’t let anyone talk you into “growth strategies” that sacrifice reliable income for potential capital gains.

Scenario 2: You have a small gap (less than $10,000/year)

This is easily fixable. Options:

• Trim lifestyle slightly
• Work part-time for a few years
• Make final super contributions before retiring
• Optimize Age Pension positioning

Scenario 3: You have a large gap (more than $15,000/year)

This requires a proper strategy. You need to either:

• Increase your super balance (more contributions, more time)
• Restructure your investments for higher income
• Reduce your lifestyle costs
• Delay retirement a few years
• Explore property equity or downsizing options

At least now you know exactly what the gap is and can make an informed decision about how to close it.

Get Your Real Retirement Income Number

You can do this calculation yourself using the framework above. But here’s what most people miss:

• They underestimate their Age Pension entitlement
• They use the wrong income rate for their investment mix
• They forget about franking credits and tax advantages
• They don’t account for inflation properly
• They miss opportunities to restructure for better income

That’s where a One Page Financial Plan comes in. We run these exact numbers – properly – and show you exactly where you stand.

For $660 (inc GST), you get:

✓ Your precise annual retirement income calculation

✓ Your exact gap (if any) and what it means

✓ Specific strategies to close any shortfall

✓ Clear answers on whether you can retire now or what needs to change

✓ 100% satisfaction guaranteed

One Page Financial Plan

Email: adam@suncow.com.au

Phone: 0418 785 200

Picture this:

You’re 58. You’ve been diligently saving into super for 30 years. Your balance has grown to $680,000. Not bad.

But every time you look at that number, you feel… anxious. Uncertain. Like you’re missing something.

You check your balance obsessively. When it’s up, you feel relief. When it’s down, you panic. You wonder: “Is this enough? Should I work another five years? What if there’s another market crash?”

Here’s what nobody’s telling you: The problem isn’t your super balance. The problem is you’ve been taught to think about retirement completely backwards.

And this backwards thinking is costing Australians years of unnecessary work and decades of unnecessary anxiety.

The Traditional Retirement Strategy (That’s Keeping You Awake at Night)

Here’s the retirement advice you’ve been hearing your entire working life:

Build up a massive pile of money

Save everything you can. Maximize your super contributions. Chase growth. Buy and sell investments to “maximize returns.” Build that balance as high as possible.

Then sell it down slowly in retirement

Once you retire, start selling your investments bit by bit. Need $60,000 this year? Sell $60,000 worth of assets. Next year? Sell another $60,000. And so on until… well, until you run out or die. Whichever comes first.

Cross your fingers and hope it lasts

Watch your balance shrink every year. Pray there’s no major market crash. Hope you don’t live “too long.” Stress about every expense. Welcome to the Fear Of Running Out – or FORO, as I call it.

Sound familiar?

This is the standard retirement strategy that financial institutions, super funds, and well-meaning advisers have been selling for decades.

There’s just one problem: It’s terrifying. And it doesn’t have to be this way.

Why the Traditional Approach Fails You

The traditional “build it up, sell it down” retirement strategy has three fatal flaws:

Flaw #1: Your retirement depends entirely on market timing

Imagine you retire in December 2007 with $800,000. You’re feeling pretty good. Then the GFC hits in 2008 and your balance crashes to $500,000.

But you still need to live. So you’re forced to sell assets at depressed prices – selling $60,000 worth of investments that were worth $100,000 just months earlier. You’re locking in losses just to pay for groceries.

Your retirement timeline just got dramatically shorter. Not because you did anything wrong. Because you retired at the wrong time.

How is that a strategy?

Flaw #2: You’re guaranteed to watch your wealth disappear

Under the traditional approach, your retirement is one long countdown. Every year, your balance gets smaller. Every purchase feels like you’re spending your future.

Start with $700,000. Five years later: $600,000. Ten years: $480,000. Fifteen years: $340,000.

You’re meant to relax and enjoy these years. Instead, you’re watching your safety net shrink month after month, wondering when it’ll run out.

The psychological toll is enormous.

Flaw #3: It forces you to become a trader in retirement

Here’s something bizarre: The traditional approach requires you to constantly buy and sell assets throughout retirement.

Need $5,000 this month? Better sell something. Market’s down 20%? Too bad – you still need to eat, so you’re selling at a loss. Market’s up? Great, but you’re also selling winners and triggering capital gains tax.

As I tell my Balmain clients: Money is like soap – the more you handle it, the less you have. Every trade costs you in fees, spreads, tax, and timing mistakes.

You spent 40 years building wealth. Why would you spend your retirement slowly dismantling it?

The Better Way to Think About Retirement

What if there was a completely different approach?

Instead of obsessing over your total super balance (a number that terrifies you), what if you focused on something else entirely: How much reliable income your assets can generate each year?

This simple shift in thinking changes everything.

“Your Retirement Number Isn’t What You Think”

Here’s the fundamental truth: You can’t spend your super balance at Coles. You can’t pay your electricity bill with your share portfolio value. You can’t take your grandkids to Luna Park with your house equity.

What you need is income. Regular, reliable, sufficient income that keeps coming whether markets go up or down.

This is what I call the income-focused approach to retirement. And it’s the exact opposite of what most Australians have been taught.

A Quick Preview: The 2 Cows Strategy

I grew up wanting to be a farmer like my parents and grandparents. That didn’t happen – I became a stockbroker instead. But farming taught me something crucial about building wealth.

Think of a farmer with two types of cows:

Dairy cows: These produce milk every single day. Regular, reliable income. The farmer never sells them – they’re too valuable. He keeps them forever and lives off the milk they produce.

Beef cattle: These don’t produce anything until you sell them for meat. They might be worth more in a few years, but they give you nothing in the meantime. And once you sell them? They’re gone forever.

Most Australians build retirement portfolios full of “beef cattle” – assets that only have value when you sell them. Growth stocks. Investment properties you plan to sell. Super balanced in growth funds.

Then they wonder why retirement feels so stressful. They’re constantly selling assets just to generate cash flow, watching their herd shrink year after year.

The smarter approach? Build a herd of “dairy cows” – income-producing assets like dividend shares, income-focused managed funds, and investment properties you keep (and rent out) forever.

Keep the cows. Milk them forever. Never sell.

This is the foundation of the 2 Cows Strategy – a complete rethink of how retirement actually works.

“The 2 Cows Strategy”

What This Means for You

If you’ve been following the traditional retirement strategy, you’ve probably experienced:

• Constant anxiety about your super balance
• Panic every time markets drop
• Confusion about whether you have “enough”
• Fear of retiring “too early” or living “too long”
• Obsessive spreadsheet checking and calculator use

This isn’t your fault. You’ve been taught the wrong strategy.

The good news? Once you shift to an income-focused approach, everything changes:

• You stop obsessing over your total balance and start focusing on annual income
• Market volatility becomes irrelevant – your income keeps flowing
• You know exactly what you can afford to spend each year
• Your assets stay intact (or even grow) throughout retirement
• FORO disappears because you’re not watching your wealth drain away

“How to Calculate Your Real Retirement Income”

The Questions You Should Be Asking

Instead of asking:

• “Do I have enough saved?”
• “What’s my super balance worth?”
• “How long will $700,000 last?”

Start asking:

• “How much annual income do I need?”
• “How much reliable income can my assets generate?”
• “Am I building dairy cows or beef cattle?”

These questions lead to completely different answers – and a completely different retirement experience.

Real Example: Two Balmain Couples, Two Strategies

Couple A: Traditional Strategy

$800,000 in super, invested in a balanced growth fund. They retire and start selling down $60,000 worth of assets each year to live on.

Year 1: Market drops 15%. Their balance falls to $680,000, but they still need $60,000 to live. They’re forced to sell at depressed prices.

Year 5: Balance is now $620,000 (after draws and market volatility). They’re stressed, second-guessing every expense.

Year 15: Balance down to $380,000. They can see the end approaching. Travel plans cancelled. Living like misers despite having hundreds of thousands left.

Couple B: Income-Focused Strategy

Same $800,000, but invested in income-producing assets generating $48,000/year in dividends and distributions. Combined with Age Pension ($18,000/year part pension), they have $66,000 annual income.

Year 1: Market drops 15%. Their balance falls to $680,000, but their income barely changes. Dividends still flow. They don’t need to sell anything.

Year 5: Market has recovered. Balance back to $820,000. Income has grown to $52,000/year through dividend increases.

Year 15: Balance now $920,000 (they never sold anything). Income now $58,000/year. They’re traveling, helping their grandkids, and sleeping soundly.

Same starting point. Completely different outcomes. The difference? Strategy.

Ready to Rethink Your Retirement Strategy?

If you’ve been following the traditional “build it up, sell it down” approach, you don’t have to keep living with FORO.

There’s a better way – one that focuses on generating reliable income instead of slowly draining your wealth.

Want to know if your current strategy is setting you up for stress or confidence?

Get a One Page Financial Plan designed for your Balmain lifestyle.

For $660 (inc GST), you’ll discover:

✓ Whether your current strategy is income-focused or sale-focused (and why it matters)

✓ How much annual income your assets can reliably generate

✓ Whether you’re on track or what needs to change

✓ A clear roadmap for building retirement income that lasts

✓ 100% satisfaction guaranteed

One Page Financial Plan page

Email: adam@suncow.com.au

Phone: 0418 785 200

I had coffee with three Balmain locals last week – all around the same age (early 60s), all with similar super balances (~$700k), all asking the same question:

“When should I actually retire?”

Person A wanted to retire at 60. “I’ve worked 40 years. I’m done.”

Person B was planning for 65. “The traditional retirement age feels right.”

Person C was resigned to working until 67. “That’s when Age Pension kicks in. Might as well work until then.”

Same financial situation. Three completely different retirement timelines.

Here’s the thing: There’s no single “right” retirement age.

But there ARE real financial and lifestyle trade-offs between 60, 65, and 67.

Some people CAN retire at 60 comfortably. Others need to work until 67. Most fall somewhere in between.

So let me break down what each retirement age actually means – financially, practically, and emotionally – so you can make the right choice for YOUR situation.

“5 Signs You’re Ready to Retire”

The Three Retirement Ages (And What They Mean)

Age 60: Early Retirement

This is when you can FIRST access your super (preservation age).

Key facts:

✓ You can access super at 60 (if you’ve stopped working)

✓ Super withdrawals are tax-free (if you’re 60+)

✗ No Age Pension until 67 (7-year gap)

✗ You need enough super to cover 7 years BEFORE Age Pension

✗ More years of retirement = need more total savings

Age 65: Traditional Retirement

The old “standard” retirement age (though it’s shifted to 67 for Age Pension).

Key facts:

✓ Super access for 5 years already

✓ Most people are genuinely ready to stop working by 65

✗ Still 2 years until Age Pension

✗ Need to bridge 2-year gap with super or part-time work

Age 67: Age Pension Age

When Age Pension eligibility kicks in (for people born 1957 or later).

Key facts:

✓ Age Pension available immediately

✓ Less super needed (pension tops up income)

✓ Maximum financial security

✗ You’ve worked 7 years longer than the person who retired at 60

✗ Less time to enjoy active retirement years

Retiring at 60: The Dream (And The Reality)

Let’s start with early retirement. Can you actually pull it off?

The Financial Reality of Retiring at 60

If you retire at 60, you’re living entirely off super until Age Pension at 67.

That’s 7 years of zero government support.

Let’s model it:

Super at age 60: $700,000

Annual living costs: $62,000/year (comfortable Balmain lifestyle)

Years until Age Pension: 7

Total drawn from super: $62,000 × 7 = $434,000

Super remaining at 67: $700,000 – $434,000 = $266,000

(This assumes zero growth, which is conservative – realistically you’d have some investment returns offsetting drawdowns)

With more realistic 4% returns during drawdown:

Super remaining at 67: ~$350,000

Then at 67:

Super income (5% of $350k): $17,500/year

Age Pension (with lower assets): $40,000+/year

Total income at 67+: ~$57,500/year

Result: You’d live slightly more frugally in your late 60s+ compared to your 60-67 years.

“What $600,000 in Super Actually Buys You”

Who Can Retire at 60?

Retiring at 60 works if:

✓ You have $750,000+ in super

✓ You own your home mortgage-free

✓ You’re comfortable drawing down super significantly in your 60s

✓ You accept lower income in your 70s+ (but supplemented by Age Pension)

✓ You prioritize enjoying your healthy 60s over financial cushion

Real Example: Sarah Who Retired at 60

Sarah, Balmain local, retired at 60.

Super: $780,000

Home: Paid off

Her plan:

Age 60-67: Draw $58,000/year from super, travel extensively, enjoy peak health

Age 67+: Modest super income + full Age Pension, less travel, more local lifestyle

Her reasoning:

“I want to hike the Camino at 62, not 72. I want to travel Southeast Asia while I’m healthy. My 70s can be quieter.”

She made a conscious trade-off: Less financial buffer later for more experiences now.

Five years in, she has zero regrets.

The Risks of Retiring at 60

✗ You burn through super faster (30-year retirement vs 23-year)

✗ More longevity risk (what if you live to 95?)

✗ More sequence-of-returns risk (market crash early hurts more)

✗ Less room for unexpected costs (health issues, family support)

✗ Harder to go back to work if you change your mind at 65

Retiring at 65: The Middle Ground

Age 65 is the “Goldilocks” retirement age for many Balmain locals.

The Financial Reality of Retiring at 65

Retiring at 65 gives you two extra advantages:

1. Five more years of super contributions (age 60-65)
2. Only a 2-year gap until Age Pension (vs 7 years at age 60)

Let’s model it:

Super at age 65: $820,000 (same person, 5 years later with contributions)

Annual living costs: $62,000/year

Years until Age Pension: 2

Total drawn from super (age 65-67): $124,000

Super remaining at 67: ~$720,000 (after modest growth)

Then at 67:

Super income (5% of $720k): $36,000/year

Age Pension (part): $22,000/year

Total income at 67+: $58,000/year

Result: Similar income throughout retirement. More financial stability.

Who Should Retire at 65?

Retiring at 65 works if:

✓ You have $650,000-$850,000 in super

✓ You own your home mortgage-free

✓ You value financial security and stability

✓ You’re willing to work 5 more years than the person who retired at 60

✓ You can still enjoy retirement in your late 60s and 70s

Real Example: Michael Who Retired at 65

Michael, Rozelle resident, planned to retire at 60 but worked until 65.

Why?

“I looked at the numbers at 60. I had $680,000. It was doable but tight. I decided to work five more years, boost my super, and retire with real comfort.”

Super at 65: $850,000

Home: Paid off

His result:

Age 65-67: $42,000/year from super

Age 67+: $35,000 from super + $23,000 Age Pension = $58,000/year

“I don’t regret working those extra five years. My wife was still working anyway. And now we have zero financial stress.”

The Sweet Spot of 65

Age 65 hits a nice balance:

✓ You’ve worked a full career (45 years if you started at 20)

✓ You’re young enough to enjoy active retirement

✓ Only a short gap until Age Pension kicks in

✓ Your super has had an extra 5 years to grow vs retiring at 60

✓ Less longevity risk (25-year retirement vs 30-year)

Retiring at 67: Maximum Security (But What’s The Cost?)

Age 67 is when Age Pension eligibility begins. Some people plan their entire retirement around this date.

The Financial Reality of Retiring at 67

Retiring at 67 means zero gap. Age Pension starts immediately.

Let’s model it:

Super at age 67: $900,000 (same person, 7 more years of contributions vs age 60)

Annual living costs: $62,000/year

Retirement income immediately:

Super income (5% of $900k): $45,000/year

Age Pension (part): $15,000/year

Total income at 67+: $60,000/year

Result: Maximum financial security. Stable income for life. Minimal drawdown risk.

Who Should Retire at 67?

Retiring at 67 works if:

✓ You have $600,000-$750,000 in super and want maximum security

✓ You have a mortgage until 67 and need to work to clear it

✓ You genuinely enjoy your work

✓ Health/mobility isn’t an issue (you’re confident you’ll be healthy enough to enjoy retirement at 67+)

✓ Financial security matters more than early retirement

Real Example: Robert Who Retired at 67

Robert, Balmain local, worked until 67 despite having adequate super at 63.

His reasoning:

“I liked my job. I was senior enough that stress was low. I got 5 weeks annual leave and worked from home two days a week. Why rush to retire?”

Super at 67: $920,000

Result:

Stable $65,000/year income for life (super + Age Pension)

Zero financial stress

Large inheritance for his kids

But:

He gave up his early-to-mid 60s to work instead of travel

By 70, health issues limited his ability to travel extensively

The Risk of Waiting Until 67

The risk isn’t financial. It’s lifestyle.

Your 60s are different from your 70s.

At 62, you can hike, travel long-haul, be spontaneous.

At 72, you might face mobility issues, health concerns, less energy.

Working until 67 to maximize financial security might mean sacrificing the most active retirement years.

You can’t buy back your 60s.

“How the Age Pension Actually Works”

The Part-Time Option: The Best of Both Worlds?

Here’s a strategy many Balmain locals miss:

Retire early (60-62) but work part-time (1-2 days/week) until 67.

How Part-Time Retirement Works

Retire from full-time work at 60-62

Work 1-2 days per week doing consulting, contracting, or part-time role

Earn $15,000-$25,000/year from part-time work

Draw less from super (only $35,000-$40,000/year instead of $60,000)

At 67, stop work completely and add Age Pension

The Numbers on Part-Time Retirement

Age 60-67 (part-time work):

Super drawdown: $38,000/year

Part-time income: $18,000/year

Total income: $56,000/year

Age 67+ (fully retired):

Super income (from $540,000 balance): $27,000/year

Age Pension: $32,000/year

Total income: $59,000/year

Result:

You get most of the benefits of early retirement (freedom, flexibility, less stress)

But preserve more super for age 67+

Plus, part-time work provides structure and social connection

“Part-Time Work in Retirement”

Who Should Consider Part-Time Retirement?

✓ You’re burnt out from full-time work but not ready to stop completely

✓ You have marketable skills (consulting, contracting, advisory roles)

✓ You want early retirement freedom without burning through super

✓ You value the social/mental stimulation of some work

✓ Your super is in the $650,000-$800,000 range (borderline for full retirement at 60)

The Forgotten Factor: Your Health

Everyone focuses on super balances and Age Pension.

But your HEALTH is the wild card.

Health Changes Everything

If you’re healthy and energetic at 60, early retirement makes sense.

If you have health issues at 60, you might NEED to retire regardless of finances.

If you’re healthy at 67, working longer is fine.

If health deteriorates at 65, you’ll regret not retiring at 60.

You can’t predict health. But you can make educated guesses:

• Family history of health issues? Consider retiring earlier.
• Physically demanding job wearing you down? Don’t wait until 67.
• Excellent health and fitness? You can probably work longer safely.

Real Example: The Couple Who Waited Too Long

James and Helen, both 64, planned to work until 67.

James had a heart attack at 65. Forced into early retirement.

Helen’s reflection:

“We had enough super to retire at 62. We were just being cautious. Now James’s health limits what we can do. I wish we’d retired three years earlier when we were both healthy.”

They have the money. They don’t have the health to enjoy it fully.

How to Decide: Your Retirement Age Framework

Here’s how to choose YOUR retirement age:

Step 1: Know Your Numbers

Current super balance: $______

Projected balance at 60: $______

Projected balance at 65: $______

Projected balance at 67: $______

Annual retirement costs: $______

Step 2: Model Each Scenario

Retire at 60:

• Income age 60-67: $______ (super only)
• Income age 67+: $______ (super + Age Pension)
• Comfortable? Y/N

Retire at 65:

• Income age 65-67: $______ (super only)
• Income age 67+: $______ (super + Age Pension)
• Comfortable? Y/N

Retire at 67:

• Income age 67+: $______ (super + Age Pension immediately)
• Comfortable? Y/N

Step 3: Factor in Non-Financial Considerations

• How much do you hate your job? (1-10)
• How’s your health? (Excellent/Good/Fair/Poor)
• What do you want to do in retirement that requires good health?
• Partner’s retirement timeline?
• Other income sources? (rental, investments, inheritance)

Step 4: Make a Decision (Not a Wish)

Don’t say “I’ll retire when I feel ready.”

Pick a date. Age 60, 63, 65, 67 – whatever.

Then plan backward:

• What super balance do I need by that date?
• What contributions do I need to make?
• What’s my drawdown strategy?

Having a target makes retirement real instead of theoretical.

What Most Balmain Pre-Retirees Actually Do

From my experience with hundreds of Balmain locals:

~20% retire at 60-62 (typically with $750k+ super or good part-time options)

~50% retire at 63-66 (the sweet spot – enough super, ready to stop, close to Age Pension)

~25% retire at 67 (financial caution, mortgage debt, or genuinely enjoy work)

~5% retire after 67 (health issues force it, or they love work)

The median Balmain retirement age: 64

Why 64?

It’s early enough to enjoy active retirement, late enough to build adequate super, and only 3 years until Age Pension.

The Bottom Line: There’s No “Right” Age

Retiring at 60 isn’t reckless if you’ve planned for it.

Retiring at 67 isn’t cowardly if it gives you peace of mind.

The right retirement age is the one that balances:

• Your financial reality (super, Age Pension, costs)
• Your health and energy levels
• Your life priorities (early freedom vs maximum security)
• Your willingness to accept trade-offs

Someone retiring at 60 trades financial cushion for time.

Someone retiring at 67 trades time for financial cushion.

Neither is wrong. They’re just different choices.

The worst choice? Drifting without a plan. Saying “I’ll figure it out later.” Working by default instead of by design.

Pick your age. Model the numbers. Make it happen.

Calculate Your Optimal Retirement Age

Should you retire at 60, 65, or 67? The answer depends on your super, your Age Pension eligibility, your costs, and your priorities.

The One Page Financial Plan models all three retirement ages and shows you exactly what each one means financially and practically.

For $660 (inc GST), you’ll discover:

✓ Your income at age 60, 65, and 67 (super + Age Pension)

✓ The real trade-offs of retiring early vs waiting

✓ Whether part-time work from 60-67 makes sense for you

✓ A clear recommendation on YOUR optimal retirement age

✓ 100% satisfaction guaranteed

One Page Financial Plan

???? Email: adam@suncow.com.au

???? Phone: 0418 785 200

You’ve earned your retirement. Now make it count.

I had a couple in my office last month – let’s call them Robert and Jane – who told me their retirement goal:

“We want to be completely self-funded. No Age Pension. We don’t want to rely on the government.”

Noble sentiment. Terrible strategy.

Robert and Jane are 59 and 61. Combined super: $780,000. Paid-off Balmain home. They’re on track to qualify for about $22,000/year in part Age Pension.

But they don’t want it.

So they’re planning to work until 67 to build their super to $1.1M+ so they can be “fully independent.”

Here’s the problem: They’re sacrificing 5-6 years of their 60s (the healthiest, most active retirement years) to avoid taking an entitlement they’ve earned through 40 years of tax.

This is financial martyrdom. And it’s surprisingly common among Balmain locals.

So let me answer the question straight: Can you retire on super alone?

Yes. But should you? That’s a different question.

“How the Age Pension Actually Works”

The Math: How Much Super You Actually Need

Let’s start with the numbers.

To retire on super alone (zero Age Pension), you need enough super to generate all your retirement income for 25-30 years.

The 4-5% Rule (Sustainable Withdrawal Rate)

Financial planners use a “safe withdrawal rate” – the percentage you can draw annually without running out.

Conservative estimate: 4% per year

Moderate estimate: 5% per year

Aggressive estimate: 6% per year (risky for 30-year retirement)

Let’s use 5% as the benchmark.

At 5% withdrawal rate:

$500,000 super = $25,000/year income

$700,000 super = $35,000/year income

$900,000 super = $45,000/year income

$1,200,000 super = $60,000/year income

$1,500,000 super = $75,000/year income

What You Need for Different Lifestyles (Balmain, No Pension)

Based on real Balmain retirement costs:

Frugal lifestyle ($52,000-$58,000/year):

Super needed: $1,040,000-$1,160,000

Comfortable lifestyle ($62,000-$72,000/year):

Super needed: $1,240,000-$1,440,000

Generous lifestyle ($78,000-$95,000/year):

Super needed: $1,560,000-$1,900,000

These are BIG numbers.

And here’s the kicker: Most Balmain pre-retirees have $600,000-$900,000 in super.

Not $1.2M-$1.9M.

“What $600,000 in Super Actually Buys You”

The Alternative: Super + Age Pension

Now let’s look at what happens when you DON’T reject Age Pension.

Example 1: Comfortable Lifestyle with Age Pension

Target income: $65,000/year

Super balance: $650,000

Super income (5%): $32,500/year

Age Pension (part): $28,000/year

Total income: $60,500/year

Result: You’re $4,500/year short, but easily manageable with minor adjustments.

To achieve the same $65,000/year WITHOUT Age Pension:

Super needed: $1,300,000

Extra super required: $650,000

That’s an extra $650,000 you need to accumulate – roughly 5-8 more years of work for most people.

Example 2: Frugal Lifestyle with Age Pension

Target income: $55,000/year

Super balance: $520,000

Super income (5%): $26,000/year

Age Pension (part): $34,000/year

Total income: $60,000/year

Result: You’ve got a $5,000/year surplus.

To achieve the same WITHOUT Age Pension:

Super needed: $1,100,000

Extra super required: $580,000

Again: 5-8 years of additional work.

Why People Want to Avoid Age Pension (And Why They’re Wrong)

Reason #1: “I Don’t Want to Rely on the Government”

I hear this constantly.

“I’ve been independent my whole life. I don’t want to be dependent on government handouts.”

Here’s the reality check:

Age Pension isn’t welfare. It’s not charity. It’s not a handout.

It’s an entitlement you’ve earned through 40 years of paying income tax, GST, and every other tax this country collects.

You’ve already paid for it. Taking it isn’t dependence – it’s getting what you paid for.

Refusing Age Pension is like refusing a tax refund because you “don’t want government handouts.”

It’s illogical.

Reason #2: “The Age Pension Won’t Be There When I Retire”

This fear is overblown.

Yes, governments tinker with eligibility. Yes, they’ve raised the age from 65 to 67. Yes, they might tighten means testing.

But the Age Pension isn’t going anywhere.

Why? Politics.

The largest voting bloc in Australia is retirees and near-retirees. Any government that tries to abolish Age Pension would be destroyed at the ballot box.

Will it stay exactly as it is? Probably not.

Will it exist in some form when you’re 70, 80, 90? Almost certainly.

Planning your retirement on the assumption it won’t exist is overly conservative to the point of self-harm.

Reason #3: “I Don’t Want to Deal with Centrelink”

Fair. Centrelink can be painful.

But you’re talking about tolerating a few hours of bureaucracy in exchange for $250,000-$500,000 over your retirement.

That’s $50,000-$100,000 per hour of Centrelink frustration.

I’d endure a lot worse for that kind of return.

Reason #4: “I Want to Leave an Inheritance”

This is the only legitimate reason to avoid Age Pension.

If your goal is to preserve maximum super to pass to your kids, then yes – staying fully self-funded makes sense.

But be honest about the trade-off:

You’re working 3-5 years longer and living more frugally in retirement so your adult children can inherit an extra $300,000-$500,000.

If that’s your priority, fine. But own the choice.

Most people would rather retire sooner and enjoy their 60s.

The Hidden Costs of Rejecting Age Pension

Let’s talk about what you’re actually giving up.

Cost #1: Years of Your Life

To accumulate an extra $500,000-$700,000 in super takes 5-8 years for most people.

That’s 5-8 years of your early 60s spent working instead of retired.

Your 60s are different from your 70s. You’re healthier. More mobile. More energetic.

Working until 67 instead of 62 to avoid Age Pension means giving up five of your healthiest retirement years.

You can’t buy those years back.

Cost #2: Opportunity Cost of $250,000-$500,000

Even a part Age Pension of $15,000-$25,000/year is worth $375,000-$625,000 over 25 years.

Refusing it means you need to generate that income from super instead.

To replace $20,000/year Age Pension, you need an extra $400,000 in super (at 5% withdrawal).

That’s a massive opportunity cost.

Cost #3: Reduced Quality of Life

If you retire on super alone with inadequate balance, you’ll spend retirement anxious about money.

“Can we afford this holiday?”

“Should we help the grandkids with that?”

“What if we live to 95 and run out?”

Constant low-level financial stress.

Meanwhile, someone with less super BUT Age Pension income has stability and peace of mind.

When Retiring on Super Alone Makes Sense

There ARE situations where self-funded retirement is the right choice:

Scenario 1: You Have $1.5M+ in Super

If you’ve got $1.5M-$2M+ in super, you don’t need Age Pension.

You can generate $75,000-$100,000/year comfortably without touching government support.

At that level, the administrative hassle of dealing with Centrelink probably isn’t worth the small part pension you’d receive anyway.

Scenario 2: You Have Significant Non-Super Income

Investment properties generating $30,000+/year in rental income

Dividends from share portfolio outside super

Part-time consulting work you enjoy

If you’ve got substantial non-super income, you might not need Age Pension.

Scenario 3: Inheritance Is Your Top Priority

If leaving maximum inheritance to your kids trumps everything else (including your own retirement lifestyle and timing), then staying fully self-funded preserves more capital.

But again: own this choice. Don’t pretend it’s about “independence.”

The Smart Strategy: Hybrid Approach

Here’s what most savvy Balmain retirees do:

They retire with $600,000-$900,000 in super PLUS part Age Pension eligibility.

Early retirement (age 60-67): Live primarily off super, minimal/no Age Pension

Mid retirement (age 67-75): Super + increasing Age Pension as assets decline

Late retirement (age 75+): Reduced super + higher Age Pension

This approach:

✓ Lets you retire sooner

✓ Provides income stability

✓ Reduces longevity risk (running out of money)

✓ Maximizes government support you’ve already paid for

This income-focused retirement strategy is the foundation of smart planning.

Real Example: The Hybrid Retirement

David and Maria, both 62, Balmain homeowners

Combined super at retirement: $720,000

Age 62-67 (pre Age Pension age):

• Draw $42,000/year from super
• Super balance at 67: ~$550,000

Age 67-77:

• Draw $30,000/year from super
• Age Pension: $30,000/year (increasing as super declines)
• Total income: $60,000/year
• Super balance at 77: ~$280,000

Age 77-90:

• Draw $15,000/year from super
• Age Pension: $42,000/year (near-full pension)
• Total income: $57,000/year

Result: They retired at 62, enjoyed their 60s fully, and have stable income through their 80s and 90s.

If they’d insisted on being fully self-funded, they’d have needed $1.3M in super and worked until 68.

What About Investment Returns?

One argument for higher super balances: “I’ll earn 7-8% returns, so I don’t need as much.”

Be very careful with this logic.

The Sequence of Returns Risk

If you retire right before a market crash (2008, 2020), your super gets hit hard early.

Example:

You retire with $800,000, planning to draw $50,000/year.

Year 1: Market crashes 25%. Your super drops to $600,000.

You still need to draw $50,000 for living expenses.

Year 2: Super is now $550,000, and the market is recovering slowly.

You’ve locked in losses by withdrawing during the downturn.

This is called “sequence of returns risk” – the order of your returns matters enormously in retirement.

Conservative planning assumes 4-5% returns, not 7-8%.

Age Pension as a Buffer

Here’s where Age Pension becomes incredibly valuable:

If markets crash, you can reduce super withdrawals and lean more on Age Pension.

This protects your super during downturns and lets it recover.

Self-funded retirees don’t have this buffer. They’re forced to sell in downturns to cover expenses.

The Real Question You Should Be Asking

Stop asking: “Can I retire on super alone?”

Start asking: “What’s the smartest way to use ALL my retirement resources?”

Those resources include:

• Your super
• Age Pension entitlement
• Your paid-off home
• Any other investments
• Potential part-time work

Using all of them strategically beats trying to be a financial martyr.

“The Real Cost of Retirement in Balmain”

The Bottom Line

Can you retire on super alone?

Yes – if you have $1.2M-$1.9M in super (depending on lifestyle).

Should you reject Age Pension for ideological reasons?

No – unless you value “independence” more than 5 extra years of your 60s and hundreds of thousands of dollars.

The smartest strategy?

Retire with adequate super ($600,000-$900,000), claim the part Age Pension you’re entitled to, and enjoy a comfortable retirement without working yourself into the ground.

You’ve paid taxes for 40 years. The Age Pension is yours. Take it.

Find Out Your Best Retirement Strategy

Should you aim for self-funded retirement or accept Age Pension? The answer depends on your super, your lifestyle, and your priorities.

The One Page Financial Plan models both scenarios and shows you the real trade-offs.

For $660 (inc GST), you’ll discover:

✓ How much super you’d need to be fully self-funded

✓ What you’d get with super + Age Pension instead

✓ The real cost (in years and dollars) of rejecting Age Pension

✓ Which strategy actually makes sense for YOU

✓ 100% satisfaction guaranteed

One Page Financial Plan

???? Email: adam@suncow.com.au

???? Phone: 0418 785 200

Every retirement calculator on the internet will tell you that you need $70,000/year in retirement.

Or $50,000. Or $85,000. Or “70% of your pre-retirement income.”

All completely useless.

Because none of them account for the fact that you live in Balmain, not Ballarat.

Council rates in Balmain? $3,500-$4,500/year.

Home insurance? $2,000-$3,000/year.

A coffee and smashed avo at Birchgrove Deli? $28.

Balmain isn’t cheap. And pretending your retirement costs will match the national average is financial fantasy.

So let me show you what retirement ACTUALLY costs in Balmain – not generic internet estimates, but real numbers from real locals who’ve been retired for 5+ years.

I’ll break it down by three lifestyle levels: Frugal, Comfortable, and Generous.

By the end, you’ll know exactly what YOUR retirement will cost.

“The $1 Million Retirement Myth”

The Three Balmain Retirement Lifestyles

Not everyone retires the same way. Some people are happy with simple pleasures. Others want to travel and dine out regularly.

Here are the three typical Balmain retirement lifestyles I see:

Lifestyle 1: Frugal ($52,000-$58,000/year)

You own your home outright. You’re careful with money but not miserable. You prioritize experiences over stuff.

What this looks like:

• Cook at home most nights, eat out once a week
• One domestic holiday per year (drive to the South Coast or Hunter Valley)
• Occasional coffee at local cafes, not daily
• Walk or use public transport, drive sparingly
• Basic private health insurance
• Enjoy free activities (walking, reading, community events)

This isn’t poverty. It’s comfortable simplicity.

Lifestyle 2: Comfortable ($62,000-$72,000/year)

You own your home. You enjoy life without obsessing over every dollar. You travel, dine out, see shows, help the grandkids.

What this looks like:

• Eat out 2-3 times per week (mix of casual and nice restaurants)
• Two holidays per year (one domestic, one short international trip)
• Daily coffee or lunch at local cafes
• Mid-level private health insurance
• Regular entertainment (theater, concerts, cinema)
• Help grandkids with birthday gifts, occasional school fees contributions

This is the “sweet spot” for most Balmain retirees.

Lifestyle 3: Generous ($78,000-$95,000/year)

You own your home. You want to enjoy retirement fully – travel extensively, dine out whenever you feel like it, never worry about the cost of a coffee.

What this looks like:

• Eat out 4-5 times per week
• Three+ holidays per year (including 2-3 week international trips)
• Top-tier private health insurance
• Regular upgrades (new car every 5 years, home renovations, quality furniture)
• Generous gifts to adult children (help with house deposits, cars)
• Premium experiences (business class flights, nice hotels)

This is financially comfortable retirement.

Breaking Down the Real Costs (Line by Line)

Let’s get specific. Here are the actual costs for a Balmain retiree couple, broken down by category.

Housing Costs (Assuming Mortgage-Free)

Council rates: $3,500-$4,500/year

Water rates: $800-$1,200/year

Home insurance: $2,000-$3,000/year

Strata (if apartment): $4,000-$8,000/year

Maintenance and repairs: $3,000-$6,000/year (gutters, painting, plumber, electrician)

Gas and electricity: $2,500-$3,500/year

Internet and phone: $1,200-$1,800/year

Total housing costs (house): $13,000-$20,000/year

Total housing costs (apartment): $14,000-$24,000/year

This is for a PAID-OFF home. If you still have a mortgage, add another $20,000-$40,000/year in repayments.

Healthcare Costs

Private health insurance (couple): $4,000-$7,000/year

GP visits and specialists: $1,500-$3,000/year (after Medicare rebates)

Medications (PBS): $500-$1,500/year

Dental: $800-$2,000/year

Physio, podiatry, optometry: $1,000-$2,000/year

Total healthcare: $7,800-$15,500/year

Important: This increases as you age. Budget $10,000-$12,000/year in your early 70s, $12,000-$18,000/year in your late 70s.

“Retirement Readiness Test”

Groceries and Food

Groceries (couple): $250-$350/week = $13,000-$18,200/year

Balmain isn’t cheap for groceries. IGA and Harris Farm prices add up.

If you’re careful and shop at Coles/Woolworths in Rozelle: $13,000-$15,000/year

If you shop mostly local/organic: $16,000-$18,200/year

Dining Out and Entertainment

This is where lifestyle choices create massive variation.

Frugal lifestyle:

• Eat out once per week: $80 × 52 = $4,160/year
• Coffee/cafe treats: $30/week = $1,560/year
• Entertainment (movies, shows): $1,000/year
• Total: ~$6,700/year

Comfortable lifestyle:

• Eat out 2-3 times per week: $150 × 52 = $7,800/year
• Coffee/cafe daily: $50/week = $2,600/year
• Entertainment (theater, concerts): $2,500/year
• Total: ~$12,900/year

Generous lifestyle:

• Eat out 4-5 times per week: $250 × 52 = $13,000/year
• Coffee/cafes/lunches: $80/week = $4,160/year
• Entertainment (premium experiences): $4,000/year
• Total: ~$21,160/year

Transport

Car registration: $400-$500/year

Car insurance: $800-$1,200/year

Fuel: $2,000-$4,000/year (depending on usage)

Servicing and repairs: $1,000-$2,000/year

Parking (if needed): $0-$2,000/year

Public transport (seniors Opal): $500-$1,000/year

Total transport (one car): $4,700-$10,700/year

Total transport (car-free, public transport): $500-$1,500/year

Many Balmain retirees ditch the car and walk/ferry/bus everywhere. Saves $8,000-$10,000/year.

Travel and Holidays

Frugal lifestyle:

• One domestic road trip: $3,000-$4,000/year

Comfortable lifestyle:

• One domestic trip: $3,500
• One short international trip (Bali, NZ): $6,000
• Total: ~$9,500/year

Generous lifestyle:

• Two domestic trips: $7,000
• Two international trips (Europe, Asia): $15,000
• Total: ~$22,000/year

Travel is the biggest variable in retirement spending.

Clothing, Personal Care, and Household

Clothing and shoes: $1,500-$3,000/year

Hairdresser/barber: $800-$1,500/year

Personal care products: $600-$1,200/year

Household items (cleaning, replacement goods): $1,500-$2,500/year

Total: $4,400-$8,200/year

Gifts and Support to Family

This varies wildly depending on family situation.

Frugal lifestyle:

• Birthday/Christmas gifts for grandkids: $1,000-$1,500/year

Comfortable lifestyle:

• Gifts + occasional help with kids’ activities: $2,500-$4,000/year

Generous lifestyle:

• Gifts + help with house deposits/school fees: $5,000-$15,000/year

Miscellaneous and Emergency Buffer

Always budget for unexpected costs:

• Pet care (if you have pets): $1,000-$3,000/year
• Subscriptions (streaming, newspapers): $500-$1,000/year
• Hobbies and interests: $1,000-$3,000/year
• Emergency buffer for unexpected repairs/health: $2,000-$4,000/year

Total: $4,500-$11,000/year

The Full Picture: Total Annual Costs

Let’s add it all up for a Balmain couple (mortgage-free, house not apartment):

Frugal Lifestyle: $52,000-$58,000/year

Housing: $13,000

Healthcare: $8,000

Groceries: $14,000

Dining/entertainment: $6,700

Transport (one car): $6,000

Travel: $3,500

Clothing/personal: $4,500

Gifts/family: $1,500

Miscellaneous: $5,000

Total: ~$62,200/year

With careful budgeting: $52,000-$58,000/year

Comfortable Lifestyle: $62,000-$72,000/year

Housing: $15,000

Healthcare: $10,000

Groceries: $16,000

Dining/entertainment: $12,900

Transport (one car): $7,000

Travel: $9,500

Clothing/personal: $6,000

Gifts/family: $3,000

Miscellaneous: $7,000

Total: ~$86,400/year

But most couples in this bracket actually spend: $62,000-$72,000/year

Why the difference? They’re strategic about where they spend. Not every category maxes out.

Generous Lifestyle: $78,000-$95,000/year

Housing: $18,000

Healthcare: $12,000

Groceries: $17,500

Dining/entertainment: $21,000

Transport (nice car): $9,000

Travel: $22,000

Clothing/personal: $7,500

Gifts/family: $8,000

Miscellaneous: $9,000

Total: ~$124,000/year

But in reality: $78,000-$95,000/year

Why? Even generous retirees have years where they don’t travel as much, or they cut back on dining out, or family support isn’t needed.

“What $600,000 in Super Actually Buys You”

What Most People Get Wrong About Retirement Costs

Mistake #1: Using the “70% Rule”

The internet says you’ll spend 70% of your pre-retirement income.

If you earned $100,000/year working, you’ll need $70,000/year in retirement.

This is nonsense.

When you retire, you eliminate:

• Commuting costs ($2,000-$4,000/year)
• Work lunches ($3,000-$5,000/year)
• Professional wardrobe ($1,000-$2,000/year)
• After-work drinks and work socializing ($2,000-$4,000/year)

But you might ADD:

• More travel ($5,000-$15,000/year)
• More dining out ($3,000-$8,000/year)
• More healthcare ($2,000-$5,000/year)

The “70% rule” is a lazy generalization. Calculate YOUR actual costs.

Mistake #2: Forgetting About Inflation

Whatever you’re spending in your 60s will cost 30-40% more by your 80s.

$60,000/year today = $78,000-$84,000/year in 20 years (at 3% inflation)

Plan for this. Your costs will increase even if your lifestyle doesn’t change.

Mistake #3: Underestimating Healthcare

Most people budget $5,000/year for healthcare and are shocked when they’re spending $12,000-$15,000/year by their mid-70s.

Healthcare costs accelerate from age 70+. Budget accordingly.

Mistake #4: Not Tracking Actual Spending

You THINK you spend $55,000/year. You ACTUALLY spend $68,000/year.

Track your spending for 3-6 months. You’ll be surprised.

The Income You Need to Cover These Costs

Now that you know what retirement costs, let’s talk about income.

Most Balmain retirees have TWO income sources:

1. Super drawdown
2. Age Pension (full or part)

Example: Comfortable Lifestyle ($65,000/year)

You need: $65,000/year

Super balance: $650,000

Sustainable super drawdown (5%): $32,500/year

Age Pension (part): $28,000/year

Total income: $60,500/year

Gap: -$4,500/year

Options:

• Reduce spending slightly ($4,500/year = $87/week)
• Draw 6% from super instead of 5% ($39,000/year)
• Work part-time 1 day/week ($8,000-$10,000/year)

Example: Frugal Lifestyle ($55,000/year)

You need: $55,000/year

Super balance: $580,000

Sustainable super drawdown (5%): $29,000/year

Age Pension (part): $32,000/year

Total income: $61,000/year

Surplus: +$6,000/year

You’re covered. Easily.

Example: Generous Lifestyle ($85,000/year)

You need: $85,000/year

Super balance: $920,000

Sustainable super drawdown (5.5%): $50,600/year

Age Pension: $8,000/year (reduced due to higher assets)

Total income: $58,600/year

Gap: -$26,400/year

Options:

• Draw 7% from super ($64,400/year – sustainable for 15-20 years)
• Scale back travel slightly (save $8,000/year)
• Downsize home, boost super to $1.2M+ (generates $66,000/year)

Single Retirees: How the Numbers Change

Everything above is for couples. Singles have different costs:

What’s Cheaper as a Single:

• Groceries: $8,000-$12,000/year (not $14,000-$18,000)
• Dining out: Less frequent
• Travel: Often cheaper (single supplements aside)

What’s More Expensive as a Single:

• Housing costs: Same rates, insurance, utilities but no one to split with
• Healthcare: Slightly higher insurance premiums

Single Retiree Budget (Balmain):

Frugal single: $38,000-$42,000/year

Comfortable single: $45,000-$52,000/year

Generous single: $55,000-$68,000/year

The Bottom Line on Retirement Costs in Balmain

Forget the generic retirement calculators.

For Balmain locals living mortgage-free:

• Frugal lifestyle: $52,000-$58,000/year
• Comfortable lifestyle: $62,000-$72,000/year
• Generous lifestyle: $78,000-$95,000/year

These aren’t poverty budgets. They’re realistic, liveable, enjoyable retirements.

The key is knowing YOUR number – not some internet average.

Track your spending now. Project your retirement costs. Calculate your income sources.

Then you’ll know if you’re ready.

Calculate Your Exact Retirement Budget

Generic calculators give you generic answers. Your retirement budget needs to reflect YOUR lifestyle in YOUR suburb.

The One Page Financial Plan gives you a customized retirement budget based on your actual spending patterns and Balmain costs.

For $660 (inc GST), you’ll discover:

✓ Your exact retirement costs (not internet estimates)

✓ Whether your super + Age Pension covers it

✓ Where you can trim costs without sacrificing quality of life

✓ What lifestyle you can actually afford in retirement

✓ 100% satisfaction guaranteed

One Page Financial Plan

???? Email: adam@suncow.com.au

???? Phone: 0418 785 200

Let me guess what you think about the Age Pension:

“I won’t get any. I own my home and have too much super.”

Or maybe:

“It’s too complicated. I’ll figure it out when I’m 67.”

Or possibly:

“The Age Pension is for poor people. I’m planning to be self-funded.”

If any of those sound like you, you’re leaving hundreds of thousands of dollars on the table.

I sit with Balmain locals every week who are shocked – genuinely shocked – to discover they qualify for Age Pension.

“But we own our home!”

“But we’ve got $700,000 in super!”

“But we’re not poor!”

Right. And you STILL qualify.

Here’s the thing about the Age Pension: It’s not welfare. It’s not charity. It’s an entitlement you’ve earned through 40 years of paying taxes.

And for most Balmain homeowners with $600,000-$900,000 in super, it’s worth $250,000-$500,000 over retirement.

That’s not pocket change. That’s life-changing money.

So let me strip away the complexity and show you exactly how the Age Pension works – no jargon, no political commentary, just the facts you need to know.

“The $1 Million Retirement Myth”

The Age Pension Basics (Start Here)

What Is the Age Pension?

The Age Pension is a fortnightly payment from the government to eligible Australians aged 67+.

As of 2025, the maximum rates are:

Singles: $1,144.40 per fortnight ($29,754/year)

Couples combined: $1,725.20 per fortnight ($44,855/year)

These amounts are indexed twice a year (March and September) and generally increase with inflation.

But here’s what most people miss: You don’t need to get the FULL pension for it to matter.

Even a PART pension of $10,000-$20,000/year is huge.

Who Qualifies?

To qualify for Age Pension, you need to meet:

1. Age requirement: 67 years old (as of 2025)
2. Residency requirement: Australian resident for 10+ years
3. Assets test: Your assets are below certain thresholds
4. Income test: Your income is below certain thresholds

The tricky part? Tests 3 and 4.

Let me break them down.

The Assets Test (This Is The Big One)

The assets test determines how much Age Pension you get based on what you OWN.

Here’s what counts as an asset:

✓ Super balance

✓ Bank accounts and cash

✓ Shares and managed funds (outside super)

✓ Investment properties

✓ Cars (except one primary vehicle)

✓ Boats, caravans, etc.

Here’s what DOESN’T count:

✗ Your primary home (this is HUGE)

✗ Your primary car

✗ Household contents and personal effects

Why Your Home Not Counting Changes Everything

This is the game-changer for Balmain locals.

Your home could be worth $2.5 million, $3 million, even $4 million – Centrelink doesn’t care.

It’s completely ignored in the assets test.

So a Balmain couple living in a $2.8M terrace with $650,000 in super is assessed exactly the same as someone in Blacktown living in a $600,000 house with $650,000 in super.

Both have $650,000 in assessable assets.

This is why so many Balmain locals are shocked they qualify.

“Balmain Property Prices and Your Retirement”

The Assets Test Thresholds (2025)

Homeowners (you own your home):

Singles:

• Under $314,000 in assets: Full Age Pension
• $314,000 – $704,500: Part Age Pension (tapers down)
• Over $704,500: No Age Pension

Couples:

• Under $470,000 in assets: Full Age Pension
• $470,000 – $1,002,000: Part Age Pension (tapers down)
• Over $1,002,000: No Age Pension

Non-homeowners (you rent):

Thresholds are ~$227,000 higher to account for lack of home ownership.

How the Taper Works

Here’s the critical bit:

For every $1,000 in assets over the lower threshold, your pension reduces by $3 per fortnight ($78/year).

Example (Balmain couple, homeowners):

Assets: $650,000 in super

Lower threshold: $470,000

Assets over threshold: $180,000

Pension reduction: $180,000 ÷ $1,000 × $78 = $14,040/year

Full pension: $44,855/year

Their pension: $44,855 – $14,040 = $30,815/year

That’s still over $30,000/year. Not nothing!

The Income Test (Less Important Than You Think)

The income test looks at your annual income to determine Age Pension eligibility.

But here’s the thing: For most retirees, the ASSETS test is more restrictive than the income test.

You get whichever test gives you LESS Age Pension. Usually, that’s the assets test.

What Counts as Income?

✓ Employment income (wages, salary)

✓ Rental income from investment properties

✓ Foreign pensions

✓ Deemed income from financial assets (more on this shortly)

What DOESN’T count:

✗ Super drawdowns (if you’re over 60)

✗ Most account-based pension payments

This is important: Your super income generally doesn’t count.

Deeming Rates (The Confusing Bit)

Centrelink doesn’t care what your investments ACTUALLY earn.

They apply “deeming rates” – assumed rates of return on your financial assets.

Current deeming rates (2025):

• 0.25% on first $62,600 for singles ($103,800 for couples)
• 2.25% on amounts above that

Example:

Couple with $650,000 in super

Deemed income:

• First $103,800 @ 0.25% = $260
• Remaining $546,200 @ 2.25% = $12,290
• Total deemed income: $12,550/year

This is VERY low compared to what they’re probably actually drawing from super ($35,000-$40,000/year).

That’s why the assets test usually bites harder than the income test.

Income Test Thresholds (2025)

Singles:

• Under $212/fortnight: Full pension
• $212 – $2,514/fortnight: Part pension
• Over $2,514/fortnight: No pension

Couples:

• Under $372/fortnight: Full pension
• $372 – $3,841/fortnight: Part pension
• Over $3,841/fortnight: No pension

Again: Most Balmain retirees fail the assets test before the income test.

Real Balmain Examples: What You’ll Actually Get

Let’s look at actual scenarios:

Example 1: The Couple with $600k Super

Situation:

• Own Balmain home (worth $2.7M – doesn’t count)
• Combined super: $600,000
• No other assets

Assets test:

• Assessable assets: $600,000
• Over threshold by: $130,000
• Pension reduction: $130,000 ÷ $1,000 × $78 = $10,140/year
• Full pension: $44,855
• Their pension: $34,715/year

Income test:

• Deemed income: ~$11,500/year
• Under threshold – PASSES income test

Result: $34,715/year Age Pension (assets test applies)

That’s nearly $35,000/year. Over 25 years: $868,000.

Example 2: The Couple with $850k Super

Situation:

• Own Rozelle apartment (worth $1.3M – doesn’t count)
• Combined super: $850,000
• $50,000 in bank accounts
• Total assessable assets: $900,000

Assets test:

• Over threshold by: $430,000
• Pension reduction: $430,000 ÷ $1,000 × $78 = $33,540/year
• Full pension: $44,855
• Their pension: $11,315/year

Result: $11,315/year Age Pension

Still worth $282,000 over 25 years. Not nothing!

Example 3: The Single Retiree with $580k Super

Situation:

• Own Balmain apartment (worth $950k – doesn’t count)
• Super: $580,000
• No other assets

Assets test:

• Assessable assets: $580,000
• Over threshold by: $266,000
• Pension reduction: $266,000 ÷ $1,000 × $78 = $20,748/year
• Full pension: $29,754
• Their pension: $9,006/year

Result: $9,006/year Age Pension

Over 25 years: $225,000. Still significant!

Strategic Positioning for Maximum Age Pension

Once you understand how it works, you can make strategic decisions to maximize your Age Pension.

[INTERNAL LINK: Link to “3 Retirement Planning Mistakes” (Blog #11) here]

Strategy #1: Timing Your Super Drawdowns

Your super balance affects your Age Pension entitlement.

As you draw down super, your assets reduce. Your Age Pension increases.

Example:

Age 67: $800,000 super → $18,000/year Age Pension

Age 72: $650,000 super → $29,700/year Age Pension

Age 77: $500,000 super → $42,000/year Age Pension

Your super is going down, but your total income (super + pension) stays relatively stable.

Strategy #2: Gifting to Adult Children

You can gift up to $10,000/year ($30,000 over 5 years) without affecting your Age Pension.

Beyond that, gifted amounts count as assets for 5 years.

Strategic gifting can help you drop below thresholds, but there are rules.

Strategy #3: Home Ownership vs Renting

Homeowners get lower asset thresholds but their home doesn’t count.

Non-homeowners get higher thresholds but pay rent from their pension.

Usually, owning wins – especially in expensive areas like Balmain.

Strategy #4: Downsizing and Age Pension

If you downsize and put proceeds into super, you might temporarily lose Age Pension.

But as you draw down over 5-10 years, your Age Pension gradually increases.

This needs careful planning, but can work brilliantly.

Strategy #5: Work Bonus for Part-Time Work

If you work part-time while receiving Age Pension:

First $300/fortnight of employment income is exempt (Work Bonus)

Anything above that reduces your pension by 50 cents per dollar

This means working one day per week usually still makes sense financially.

Common Age Pension Myths (Busted)

Myth #1: “I own my home so I won’t get any pension”

FALSE. Your home doesn’t count in the assets test.

Homeowners with $600k-$900k super often get $10k-$35k/year pension.

Myth #2: “The Age Pension won’t be there when I retire”

Unlikely. The Age Pension is politically sacred.

They might tweak eligibility or indexation, but it’s not going away.

Plan assuming it exists – just don’t rely on it 100%.

Myth #3: “I should aim to be self-funded to avoid means testing”

This is terrible logic.

You’d need an extra $500,000-$700,000 in super to replace what Age Pension provides.

Most people are better off with less super + Age Pension than massive super + no pension.

Myth #4: “Super income counts against Age Pension”

Mostly false. If you’re over 60, most super drawdowns don’t count as income.

Centrelink uses deeming rates on your super balance (assets test), not your actual withdrawals (income test).

Myth #5: “I can’t get Age Pension while working”

False. You can work part-time and receive Age Pension.

First $300/fortnight is exempt. After that, pension reduces 50 cents per dollar earned.

How to Calculate Your Age Pension Right Now

Step 1: Use the Official Calculator

Go to: servicesaustralia.gov.au

Search for: Age Pension calculator

Age Pension calculator

You’ll need:

• Your super balance
• Other financial assets (bank accounts, shares, etc.)
• Whether you own your home
• Any other income sources

Time required: 10-15 minutes

Step 2: Run Multiple Scenarios

Don’t just calculate your current position.

Model what happens at different ages and asset levels:

• Age 67 with current assets
• Age 72 with reduced assets (after drawdowns)
• Age 77 with further reduced assets

This shows you how your Age Pension grows as your assets reduce.

Step 3: Factor It Into Your Retirement Plan

Once you know your Age Pension entitlement, add it to your retirement income:

Super income: $______/year

Age Pension: $______/year

Other income: $______/year

Total: $______/year

Does that cover your costs?

If yes, you’re ready to retire.

If no, you know exactly what gap you need to close.

Why This Matters More Than You Think

The Age Pension isn’t just “nice to have.”

For most Balmain homeowners, it’s the difference between:

• Retiring at 62 vs working until 67
• Comfortable retirement vs frugal retirement
• Travelling regularly vs staying home
• Helping kids with house deposits vs protecting every dollar

Even a part pension of $15,000/year is equivalent to having an extra $375,000 in super generating 4% returns.

Ignoring it is financial malpractice.

The Bottom Line

The Age Pension is:

✓ An entitlement you’ve earned through decades of tax

✓ Worth $250,000-$500,000+ over retirement for most Balmain locals

✓ Available even if you own a multi-million dollar home

✓ Easier to qualify for than most people think

✓ Worth 10-15 minutes of your time to calculate

Stop assuming you won’t get it.

Stop ignoring it in your retirement planning.

Stop leaving hundreds of thousands of dollars on the table.

Calculate your entitlement. Factor it into your plan. Retire sooner.

Get Your Exact Age Pension Calculation

The online calculator gives you a rough estimate. But strategic Age Pension positioning requires deeper analysis.

The One Page Financial Plan includes your exact Age Pension entitlement AND shows you how to maximize it through strategic decisions.

For $660 (inc GST), you’ll discover:

✓ Your exact Age Pension (now and at future ages as assets reduce)

✓ Whether strategic decisions could increase your pension

✓ How Age Pension affects your total retirement income

✓ What this means for when you can actually retire

✓ 100% satisfaction guaranteed

One Page Financial Plan

???? Email: adam@suncow.com.au

???? Phone: 0418 785 200

I’m about to tell you about three mistakes that cost Balmain pre-retirees an average of $200,000-$300,000 over their retirement.

These aren’t exotic financial strategies or complex tax schemes.

They’re simple, common mistakes that I see every single week in my Balmain office.

The worst part? Most people don’t even realize they’re making them until it’s too late.

Last month, I sat with a couple – let’s call them John and Margaret – who’d just retired. Combined super: $720,000. Paid-off Balmain home worth $2.8M. They looked set.

But they’d made Mistake #1 (which I’ll explain shortly), and it cost them approximately $280,000 over their expected retirement.

That’s not a typo. $280,000. Gone. Because of one preventable mistake.

Here’s the thing about retirement planning mistakes: They compound. They multiply. A small error at age 60 becomes a six-figure problem by age 75.

So let me show you the three biggest mistakes Balmain locals make – and more importantly, how to avoid them.

Mistake #1: Ignoring Age Pension Optimization (Cost: $250,000-$400,000)

This is the big one. The mistake that costs more than any other.

And it’s incredibly common among Balmain homeowners with decent super balances.

What the Mistake Looks Like

You own your Balmain home outright (or nearly). You’ve got $700,000-$900,000 in super. You’re responsible, frugal, independent.

You assume: “I won’t get any Age Pension. My assets are too high. I need to be completely self-funded.”

So you plan your entire retirement around zero Age Pension income.

Problem: You’re wrong. And that assumption costs you hundreds of thousands of dollars.

The Reality Most People Miss

Your home doesn’t count in the Age Pension assets test.

You could have a $3 million Balmain terrace, and Centrelink ignores it completely.

What counts:

• Your super balance
• Investment properties
• Shares outside super
• Cash and bank accounts

Current thresholds (2025) for homeowners:

Couples can have up to $1,002,000 in assets and still receive part Age Pension

Singles can have up to $704,500 in assets and still receive part Age Pension

Even a part pension of $15,000-$20,000/year is massive over 25 years.

“How the Age Pension Actually Works”

Real Example: John and Margaret’s $280,000 Mistake

Remember John and Margaret from the opening?

Combined super: $720,000

Home: Paid off, worth $2.8M

They’d planned their retirement assuming zero Age Pension.

Their plan: Draw $48,000/year from super until it runs out.

The problem: They actually qualified for approximately $16,000/year part Age Pension.

But they didn’t know. So they drew more from super than necessary.

The cost:

Over 25 years: $16,000/year × 25 = $400,000 in Age Pension they didn’t know they could claim

Plus: By drawing down super faster, they reduced their balance, which would have eventually qualified them for even MORE Age Pension

Total opportunity cost: ~$280,000 over retirement

All because they didn’t spend 30 minutes with the Age Pension calculator.

How to Avoid This Mistake

Step 1: Use the Services Australia Age Pension calculator RIGHT NOW

Age Pension calculator

Input your actual numbers:

• Do you own your home? (Yes)
• Super balance
• Other investments
• Any other assessable assets

Step 2: Understand strategic positioning

If you’re close to the threshold, strategic decisions can make a huge difference:

• Timing of super contributions
• When to start drawing down
• Whether to gift money to adult children
• How to structure investments

Step 3: Re-assess every 2-3 years

As you draw down super, your assets reduce. Your Age Pension entitlement increases.

Someone who gets zero Age Pension at 67 might qualify for $10,000/year by 72 and $20,000/year by 77.

But only if they’re checking regularly.

The Bottom Line on Mistake #1

If you haven’t calculated your Age Pension entitlement in the last 6 months, you’re probably leaving money on the table.

For Balmain homeowners with $600k-$900k in super, that’s typically worth $250,000-$400,000 over a 25-year retirement.

Mistake #2: Paying Off Your Mortgage Too Late (Or Not At All)

This one destroys retirement plans.

I see it constantly: Someone retires at 65 with $750,000 in super and a $280,000 mortgage with 8 years remaining.

“We’ll just keep making the repayments from super,” they say.

Big mistake.

Why This Is So Costly

Let’s do the math:

$280,000 mortgage, 8 years remaining, 5.5% interest rate

Monthly repayment: ~$3,400

Annual cost: ~$41,000

Over 8 years, you’ll pay:

Principal: $280,000

Interest: ~$45,000

Total: $325,000

Now, you’re drawing $41,000/year from super to make these repayments.

But here’s what you’re missing:

That $41,000/year isn’t just leaving your super. It’s also:

• Reducing your super balance faster (less compound growth)
• Limiting your Age Pension eligibility (more assets = less pension)
• Creating stress and cash flow pressure

The real cost isn’t $325,000. It’s closer to $400,000-$450,000 when you factor in lost investment growth and reduced Age Pension over 20+ years.

Real Example: The Couple Who Kept Their Mortgage

David and Lisa, both 64, Lilyfield.

Super: $680,000 combined

Mortgage: $310,000 remaining (10 years left)

They retired anyway, planning to pay the mortgage from super.

Within three years, they were stressed.

Super balance: Down to $550,000

Annual costs: $63,000 (including $38,000 mortgage payments)

Super drawdown: $63,000/year

At that rate, their super would be gone by age 73.

They ended up selling their home at 67, downsizing to an apartment, and using the equity to clear the mortgage.

If they’d done that at 64 instead of 67, they’d have saved ~$45,000 in interest plus three years of stress.

“Balmain Property Prices and Your Retirement”

The Better Strategy

Option 1: Pay it off before you retire

If you’re 60 with $280,000 owing:

• Salary sacrifice aggressively for 3-4 years
• Make extra repayments
• Use any bonus/redundancy to clear it

Then retire mortgage-free at 63-64 instead of 60 with a mortgage.

Option 2: Use accessible super to clear it at retirement

If you’re 60+ and can access your super, pay off the mortgage in full.

Yes, it reduces your super balance. But it dramatically reduces your annual costs.

Example:

Super: $650,000

Mortgage: $250,000

Option A (keep mortgage): Draw $53,000/year from super ($32k living + $21k mortgage)

Option B (pay off mortgage): Use $250k from super, leaving $400k. Draw $32,000/year.

Option B is better:

• Lower annual drawdown (super lasts longer)
• Less stress
• Eventually qualify for more Age Pension (lower assets)

Option 3: Downsize strategically

If your Balmain property is worth $2.5M+ and you owe $300k:

Sell, buy a $1.3M apartment, clear the mortgage, bank $900k+ after costs.

Your mortgage problem just became a surplus income opportunity.

The Bottom Line on Mistake #2

Carrying a mortgage into retirement costs you $150,000-$300,000+ over 20 years through interest, lost investment growth, and reduced Age Pension.

Clear it before you retire, or have a very clear plan for clearing it within 2-3 years.

Mistake #3: Wrong Investment Strategy for Your Timeline (Cost: $100,000-$250,000)

This one’s subtle but devastating.

Your investment strategy should match your retirement timeline.

Get it wrong, and you either:

• Lose massive amounts in a market crash right before retirement, OR
• Miss out on years of growth by being too conservative too early

Both mistakes cost six figures.

The Two Ways This Goes Wrong

Problem A: Too aggressive too late

You’re 63, retiring in 2 years. Your super is 80% in high-growth shares.

Market crashes (like 2008, 2020). Your $700,000 drops to $490,000 overnight.

You either:

• Delay retirement 3-5 years (cost: years of your life)
• Retire anyway and lock in losses (cost: $210,000)

Problem B: Too conservative too early

You’re 52, retiring at 67. Your super is 100% in cash and bonds earning 2.5%.

Over 15 years, you miss out on 5-6% returns from balanced growth.

Cost: ~$180,000 in lost compound growth on a $500,000 balance.

“Retirement Income vs Lump Sum”

Real Example: The Market Crash That Delayed Retirement

Robert, 64, planned to retire at 65.

Super in February 2020: $820,000 (invested 85% in growth assets)

Super in April 2020: $640,000 (market crash)

He panicked. Stayed working three more years until his super recovered.

The cost:

• Three years of his 60s spent working instead of retired
• Stress and regret

If he’d shifted to a more conservative strategy at 62, the crash would have hit him much softer ($750,000 instead of $640,000), and he could have retired as planned.

The Right Strategy by Timeline

Here’s the framework:

10+ years until retirement:

• 60-80% growth assets is fine
• You have time to recover from downturns
• Focus on accumulation and compound growth

5-10 years until retirement:

• Shift to 50-60% growth, 40-50% defensive
• Balanced approach
• Start thinking about income generation

2-5 years until retirement:

• Shift to 30-40% growth, 60-70% defensive/income
• Capital preservation becomes important
• Focus on reliable income streams

Retired (or within 12 months):

• 20-30% growth, 70-80% income/defensive
• Sustainable income generation
• Protect against major market shocks

The Income-Focused Approach

Once you’re within 5 years of retirement, shift your thinking:

Stop asking: “How much will my super grow?”

Start asking: “How much reliable income can my super generate?”

This means:

• Dividend-paying shares instead of pure growth stocks
• Income-focused managed funds
• Hybrid securities
• Some defensive assets (bonds, cash)

The goal: Generate $40,000-$50,000/year reliably from a $700,000 balance, regardless of what the market does.

You’re not trying to turn $700k into $1M. You’re trying to create sustainable income.

How to Check Your Strategy Right Now

Log into your super fund.

Look at your investment option. What’s your allocation?

Ask yourself:

1. When am I planning to retire?
2. Does my current investment strategy match that timeline?
3. If the market dropped 30% tomorrow, would it derail my retirement?

If the answer to #3 is “yes,” you’re too aggressive.

The Bottom Line on Mistake #3

Getting your investment strategy wrong costs $100,000-$250,000 through either market losses at the wrong time or missed growth opportunities.

Match your strategy to your timeline. Shift gradually. Don’t wait until 12 months before retirement to change everything.

The Compounding Effect of Multiple Mistakes

Here’s the really scary part:

These mistakes don’t exist in isolation. They compound each other.

Real example: A Balmain couple who made all three mistakes:

Mistake #1: Ignored Age Pension (cost: $320,000 over 25 years)

Mistake #2: Kept $260,000 mortgage until age 70 (cost: $180,000 in interest + lost growth)

Mistake #3: Too aggressive at 64, lost $150,000 in market crash (cost: 3 years delayed retirement)

Total cost: $650,000+

That’s not a hypothetical. That’s a real couple I met in 2023.

They’re now 68, still working, and deeply regret not getting proper advice at 62.

How to Avoid All Three Mistakes

Here’s your action plan:

Step 1: Age Pension Audit (This Week)

Go to servicesaustralia.gov.au

Use the Age Pension calculator

Input your actual numbers

If you qualify for ANY Age Pension, factor it into your retirement plan

Time required: 20 minutes

Potential value: $250,000-$400,000

Step 2: Mortgage Strategy (This Month)

If you have a mortgage:

• How much do you owe?
• When will it be paid off?
• What’s your plan to clear it before/at retirement?

If you’re retiring in 3-5 years with significant mortgage debt, get advice NOW on the best strategy (pay down vs lump sum vs downsize).

Time required: 2-3 hours of analysis

Potential value: $150,000-$300,000

Step 3: Investment Strategy Review (This Quarter)

Log into your super

Check your investment allocation

Compare it to your retirement timeline (using the framework above)

If there’s a mismatch, change it

Most super funds let you switch investment options online in minutes

Time required: 1 hour

Potential value: $100,000-$250,000

The $600,000 Question

Here’s what I tell every Balmain pre-retiree:

You can lose $200,000-$600,000 over your retirement by making these three mistakes.

OR you can spend a few hours and a few hundred dollars getting proper advice and avoid them completely.

Which makes more sense?

Most people spend more time planning a two-week holiday than planning a 30-year retirement.

Then they wonder why they’re struggling at 72.

Don’t be that person.

The Bottom Line

These three mistakes – ignoring Age Pension, carrying mortgage debt into retirement, and wrong investment strategy for your timeline – cost Balmain retirees an average of $200,000-$300,000 each.

Combined? Up to $600,000+ over a 25-year retirement.

The good news: They’re all preventable.

The bad news: Most people don’t realize they’re making them until it’s too late.

You’ve now been warned.

What you do with that information is up to you.

Find Out If You’re Making These Mistakes

Most Balmain pre-retirees are making at least one of these mistakes. Many are making all three.

The One Page Financial Plan identifies which mistakes you’re making (or about to make) and shows you exactly how to avoid them.

For $660 (inc GST), you’ll discover:

✓ Your actual Age Pension entitlement (not a guess)

✓ Whether your mortgage strategy is costing you six figures

✓ If your investment strategy matches your retirement timeline

✓ Exactly what to change to avoid these costly mistakes

✓ 100% satisfaction guaranteed

One Page Financial Plan

???? Email: adam@suncow.com.au

???? Phone: 0418 785 200