Most retirement outcomes are not decided by market crashes or bad luck. They are decided by a handful of avoidable retirement planning mistakes, usually made years before retirement day.
Effective retirement planning is about making informed decisions early and reviewing them regularly to avoid making mistakes that can reduce your retirement savings over time.
Here are the ten most common retirement planning mistakes and how to address each one.
1. Starting Too Late
One of the biggest retirement planning mistakes is waiting too long to begin saving.
Compounding rewards time more than amounts. $500 a month at 7% grows to roughly $1.3 million over 40 years but only about $610,000 over 30. Every decade of delay roughly halves the outcome.
The most effective approach is to begin retirement planning with whatever amount is currently available, then increase contributions as your income grows.
2. Not Knowing Your Retirement Planning Number
Retirement planning without a clear financial target can leave you discovering a shortfall at 60, when the cheapest fixes are gone. ASFA estimates a comfortable retirement needs around $690,000 for a home-owning couple and $595,000 for a single at 67, with a part Age Pension.
Your personal retirement planning target will depend on your desired lifestyle and sources of income. Work out your version, compare it to your projected balance and let the gap set your savings rate.
3. Underestimating How Long Retirement Lasts
A 65-year-old Australian man can expect to live to around 85 and a woman to around 88, and for a couple there is a strong chance one reaches their mid-90s. Planning to 85 when you live to 95 means a decade with no money.
Assume a long life and keep growth assets working through retirement.
4. Ignoring Inflation
At 2.5% inflation, prices double roughly every 28 years, and a $70,000 lifestyle today costs about $115,000 a year in 20 years. Retirees who move everything to cash for safety watch their purchasing power quietly erode instead.
Keep a sensible allocation to assets that historically outpace inflation.
5. Paying Too Much in Fees
Fees compound just like returns, only against you. The Productivity Commission found an extra 0.5% a year costs a typical worker around 12% of their balance by retirement, well over $100,000 for many.
With competitive MySuper products under 1% all-in, check your fund against the market once a year.
6. Losing Track of Super Accounts
The ATO holds more than $17 billion in lost and unclaimed super, and millions of Australians still have multiple accounts, each charging its own fees and insurance premiums.
Consolidating takes minutes through myGov. Just check the insurance inside an old fund before closing it.
7. Getting the Risk Setting Wrong
This runs both ways. Sitting in a conservative option through your 30s and 40s forgoes decades of growth. Being fully in shares at 64 exposes you to sequence risk: the global financial crisis (GFC) roughly halved the Australian market, and retirees forced to sell crystallised losses permanently.
Match risk to your time horizon, and hold two to three years of spending in defensive assets near retirement.
8. Raiding Super Early
Around three million Australians withdrew about $36 billion under the COVID early release scheme. The long-term price is steep: $20,000 taken at 35 is roughly $170,000 missing at 67 at 7% returns.
Outside genuine hardship, treat super as untouchable, and avoid carrying a mortgage into retirement for the same reason.
9. Forgetting Tax and the Age Pension
Structure matters as much as the balance. Super is generally tax free after 60, contribution timing can shift outcomes under the assets test, and spouse strategies can improve a couple’s position.
Retirees sitting just above a pension threshold often forgo thousands that modest restructuring would unlock. Advice either side of retirement usually pays for itself.
10. Setting and Forgetting
Rules change constantly: the Superannuation Guarantee reached 12% in July 2025 and the transfer balance cap moved to $2 million. Personal circumstances change faster.
An annual review of contributions, fees, investment settings and progress is the cheapest insurance available.
The Common Thread in Retirement Planning
None of these mistakes needs a crash to do damage, and none needs brilliance to avoid. They are errors of inattention, and the earlier corrected, the cheaper the fix. The most expensive mistake of all is assuming there will be time to deal with it later.
This information is general in nature and does not take into account your personal objectives, financial situation or needs. It is not intended as financial advice. Please speak with a licensed financial adviser before making any decisions about your superannuation.
