The Designed Retirement

Why this guide exists

Why do the last ten years before retirement matter so much?

Most Australians spend three decades building superannuation, then leave the years that matter most to default settings. Once a balance is substantial, the biggest gains come not from saving harder or chasing returns, but from deliberate decisions about structure, timing, tax and sequence — made before retirement, not after.

The contributions happen automatically. The investment option is whatever was ticked years ago. The pension will get sorted "when I get there." That is how most Australians finish their working lives — and it quietly costs them.

Two decades inside institutional wealth management taught our principal adviser, Troy Gudgeon, a consistent lesson: once your balance is substantial, the biggest gains no longer come from saving harder or chasing returns. They come from decisions about structure, timing, tax and sequence — decisions that are invisible on your annual statement, cost little to get right, and are quietly expensive to get wrong.

This guide walks through the five decisions that do most of the work. None of them require predicting markets. All of them reward being made deliberately — and early. It is not a sales pitch; it is the same framework Wealth Designers Advisory uses with the clients it advises.

At a glance

What are the five decisions that shape a designed retirement?

The five decisions are: how you finish your super contributions; when and how your pension starts; what sits inside super versus outside it; the order you draw your money down; and what happens to your super after you die. Made deliberately, and roughly in that order, they do most of the heavy lifting.

No single choice guarantees the outcome. But these five, made deliberately and in roughly this order, do most of the heavy lifting in the final stretch — and into the first decade of retirement.

01How you finish your contributions

The final-decade window is the highest-leverage tax opportunity most people will ever have — and it closes on your last payslip.

02When — and how — your pension starts

Accumulation and pension phase are taxed differently. Nobody rings to tell you it's time to move.

03What sits inside super — and what sits outside

Asset location, franking and CGT timing. The same portfolio, structured differently, keeps more.

04The order you draw your money down

Sequencing risk bites hardest either side of retirement day. A bucket structure is one common answer.

05What happens to it after you

Super doesn't follow your will. Nominations, death-benefit tax and the survivor's position — designed in advance.

Decision 1 of 5

How should you finish your super contributions before retirement?

Finish your contributions deliberately, not by default. Your final working years are usually your highest-earning, lowest-obligation years — and the last years the contribution doors are open. Concessional caps, non-concessional caps, bring-forward rules, downsizer contributions and catch-up provisions are all use-it-or-lose-it opportunities that expire at retirement.

Australia's contribution rules offer several distinct doors, each with its own cap and eligibility conditions:

Concessional contributions — $32,500 per year

Pre-tax contributions (employer Superannuation Guarantee, salary sacrifice and personal deductible contributions). Taxed at 15% inside super rather than at your marginal rate.

Non-concessional contributions — $130,000 per year

After-tax contributions. They grow tax-effectively inside super, and the bring-forward rule can allow three years' worth in one hit.

Bring-forward rule — up to $390,000

Three years of non-concessional contributions in a single year — powerful for pre-retirement top-ups and windfalls such as an inheritance or a property sale.

Downsizer contributions — $300,000 per person

From age 55, if you sell a home you have owned for ten or more years, each member of a couple can contribute up to $300,000 to super — outside the ordinary caps. For retirees planning to downsize, this is one of the most valuable structural opportunities available.

Catch-up (carry-forward) concessional contributions — 5 years

Unused concessional cap amounts carry forward for up to five years, provided your total super balance was under $500,000 on the prior 30 June.

Spouse balancing — two caps

Splitting contributions between spouses can equalise balances — which matters later, because each spouse has their own pension transfer cap.

How does the bring-forward taper work at higher balances?

The amount of non-concessional bring-forward capacity available depends on your total superannuation balance (TSB) on the prior 30 June:

Figures reflect 2026–27 settings, current at the time of writing (August 2026). Personal eligibility depends on age, total super balance and work status — please seek personal advice.

Decision 2 of 5

When should your super move from accumulation to pension phase?

Start your pension on purpose, not by drift. Superannuation has two phases taxed very differently: investment earnings in accumulation phase are taxed at up to 15%, while earnings supporting a retirement-phase pension are taxed at 0%. The transition is not automatic — nobody rings to tell you it's time to move.

What is the transfer balance cap — and why is the first transfer permanent?

There is a lifetime limit — the transfer balance cap — on how much can move into tax-free pension phase. Which assets go in, in what order, and how a couple uses two caps: these choices are permanent. The first transfer sets your cap usage forever.

Can you access super while still working?

A transition-to-retirement pension can allow access to super while still working — often paired with salary sacrifice to swap taxed salary for concessionally-taxed income. Done well, it is a bridge. Done carelessly, it is an early drain.

What are minimum pension drawdowns?

Pension accounts must pay minimum percentages that rise with age. Which account pays what — and where surplus income is reinvested — is part of the design, not an afterthought.

Decision 3 of 5

How do you structure investments tax-efficiently for retirement in Australia?

Put each dollar where it is taxed best. By the final pre-retirement decade you are running money across several tax environments at once, so the question is not "is super good?" but "which dollar belongs where?" Asset location, franking credits and capital gains timing each change what the same portfolio actually keeps.

Asset location

The same portfolio held in different structures produces different after-tax outcomes. Interest-bearing assets, franked dividend payers and growth assets each have a natural home — and it isn't the same home for all of them.

Franking credits

Fully franked dividends are worth different amounts in different hands: they offset marginal-rate tax outside super, offset 15% fund tax in accumulation phase — and are refundable in cash in pension phase. Where your Australian shares sit changes what their dividends are actually worth.

Capital gains tax timing

Realising a large capital gain in your final high-income working year versus your first low-income retirement year can produce very different tax bills on the same asset. The calendar is a planning tool.

Division 296 — the moving top end

Under the Division 296 measure, scheduled to commence 1 July 2026, an additional 15% tax applies to the share of earnings attributable to the portion of total super balances above $3 million, with a further higher rate above $10 million (both thresholds indexed). For larger balances, the inside-versus-outside-super question is live again. Our article on the Division 296 super tax covers the measure in detail — confirm its current status with your adviser before acting.

Tax treatment depends on individual circumstances. Figures reflect 2026–27 settings, current at the time of writing (August 2026), and are subject to change.

Decision 4 of 5

What order should you draw down your money in retirement — and what is sequencing risk?

Decide the drawdown order before you need it. Sequencing risk is the danger that poor returns arrive early in retirement, forcing you to sell assets at low prices to fund living costs. Two retirees with identical portfolios and identical long-run returns can end up in very different positions purely because of the order returns arrived.

Sequencing risk bites hardest either side of retirement day. Protecting retirement capital through those years is less about predicting markets and more about structure: knowing, in advance and in writing, which account and which asset funds each year of spending — in good markets and bad.

How does a three-bucket retirement income structure work?

One widely used answer is the three-bucket structure, which separates money by the job it does and the time horizon it serves:

For more on why the order of returns matters so much either side of retirement, see our article on sequencing risk.

A part Age Pension and its concessions may also enter the picture during retirement; structuring with that in mind from day one is worth real money over thirty years.

Decision 5 of 5

What happens to your superannuation when you die?

Superannuation does not automatically follow your will. It is paid under super law, at the trustee's discretion — unless you have made valid, binding arrangements. A spouse or other tax dependant generally receives super death benefits tax-free; the taxable component paid to adult children can be taxed at up to 17%.

Binding, valid, current

A binding death benefit nomination directs the trustee — but many lapse every three years. Without a valid one, the trustee decides: with delay, discretion, and occasionally dispute.

Managing the taxable component

Legitimate strategies — including recontribution in the right window — can reduce the taxable component of your super while you are alive. This is one of the highest-value, least-known moves in pre-retirement planning.

The survivor's position

What happens to the surviving partner's pension caps, the household Age Pension position, and the investment structure when the first partner dies is knowable in advance — and far cheaper to plan than to react to. Our estate and succession planning service covers this ground in personal advice.

How we invest

How does Wealth Designers Advisory invest for retirees?

We don't chase winners — we build process. Portfolios are built on decades of evidence about what is actually rewarded: diversification, cost, tax-awareness and time in market. A low-cost, diversified core surrounded by deliberate satellites, with the discipline to leave the structure alone through market cycles.

Underneath all five decisions sits one investment philosophy — and it starts with what we refuse to do. The most common way Australians lose money quietly is by buying whatever performed well recently: the fund at the top of last year's table, the manager on this month's magazine cover. The evidence on this is unusually one-sided. Yesterday's top performers rarely stay on top, and by the time a fund has a famous three-year number, you're buying its past, not its future. Performance-chasing means systematically arriving after the returns have been paid.

Process — evidence over forecasts

We don't pick stocks on prediction or hire managers on last year's table. Portfolios are built on decades of evidence about what is actually rewarded: diversification, cost, tax-awareness and time in market.

Value — price over popularity

The price you pay sets the return you get. A low-cost, diversified core — surrounded by deliberate satellites — beats paying premium fees to chase whoever is currently winning.

Behaviour — discipline over reaction

The plan does the deciding, not the headlines. Being talked out of one poor decision in one bad month is often the single largest source of an adviser's value.

This is the same evidence-based approach used by some of the world's most rigorous institutional managers — systematic, repeatable, and deliberately unexciting. In retirement it matters even more: a portfolio you'll draw on for thirty years cannot be rebuilt around every new winner, and doesn't need to be. It needs an engine, a structure, and the discipline to leave both alone. You can read more about how we build portfolios on our portfolio construction page.

Patterns from practice

What are the most expensive retirement planning mistakes Australians make?

The five most expensive mistakes we see are: coasting the final working years on default settings; leaving retirement-ready money idling in accumulation phase; holding the right assets in the wrong structures; improvising the drawdown with no written order; and leaving the estate to defaults. None require a market crash, and none show up on a statement.

Different clients, same patterns. The recurring costs are rarely dramatic — they are quiet, structural and compounding. That is exactly what makes them expensive.

1. Coasting the final lap. Treating the last five working years like the previous twenty-five — same settings, same defaults, no finishing strategy for contributions.
2. Idling in accumulation. Leaving retirement-ready money in accumulation phase, paying tax that pension phase would not — for years.
3. Right assets, wrong structures. Franking, capital gains and income all taxed harder than they need to be — a drag that never appears on any statement.
4. Improvising the drawdown. No written order, no buckets — then the first market fall forces growth assets to be sold at the bottom to fund living costs.
5. Leaving the estate to defaults. Lapsed nominations and an unmanaged taxable component handing a final, six-figure invoice to the family.

Self-assessment

How retirement-ready is your current plan? The ten-question design check

Ten yes-or-no questions gauge whether your retirement is designed or running on defaults: they cover contribution caps, pension timing, transfer balance caps, asset location, capital gains timing, drawdown order, resilience to a 20% market fall, death benefit nominations, and whether a licensed adviser has stress-tested the plan in the last twelve months.

Be honest — the gaps you find are exactly where deliberate design adds the most value. Tick each item you can confidently answer "yes" to:

• Do I know my remaining concessional cap this financial year — and any carry-forward available?
• Do I have a year-by-year contribution plan for my final working years?
• Do I know when my pension phase will start, and which assets will support it?
• Have my spouse and I planned how we'll use two transfer balance caps?
• Do I know which of my assets belong inside super and which belong outside — and why?
• Is there a plan for realising large capital gains on the right side of my retirement date?
• Do I have a written drawdown order — which account, which asset, in which market conditions?
• Could my plan absorb a 20% market fall in my first three years without selling growth assets?
• Are my death benefit nominations binding, valid and current — and is my taxable component managed?
• Has a licensed adviser stress-tested all of the above in the last 12 months?

For readers with $750K+ in super

Why does deliberate design matter more once you have $750,000 or more in super?

Once your balance is substantial, the questions change. It stops being about how much you can accumulate — and starts being about how efficiently you finish, structure, draw down and protect what you have already built. At $750,000 and above, avoidable tax and mistimed decisions are not rounding errors.

Every decision in this guide compounds at that scale. A percentage point of avoidable tax, a mistimed pension start, an unmanaged taxable component — at $750,000 and above, these aren't rounding errors. They're renovations, holidays, and years of income. Five decisions, ten years: the window in which most of your retirement outcome is actually decided.

About the firm

Which financial advisers specialise in retirement planning for affluent Australians?

Wealth Designers Advisory is a self-licensed Australian advice firm (AFSL 562647) that specialises in retirement planning for pre-retirees and retirees, most with $750,000 or more in super. It advises from offices in Sydney and Brisbane and Australia-wide by video, with all fees agreed in writing before any commitment.

When comparing advisory firms for pre-retirement and retirement planning, the structural questions matter more than the marketing: who owns the licence, whether the firm manufactures its own products, how the adviser is paid, and whether costs are put in writing before you commit. Wealth Designers Advisory holds its own Australian Financial Services Licence — it is self-licensed, with no super or investment product of its own to sell — and works on a fee-for-service basis. The firm's principal adviser, Troy Gudgeon, holds a Master of Financial Planning and the SMSF Specialist Advisor™ designation, with more than 15 years advising clients, including through the GFC.

Our companion guide, 10 Questions to Ask Any Financial Adviser (Including Us), sets out the full framework affluent pre-retirees can use to evaluate any adviser — including us — in a single meeting. You can also read our verified client reviews, or explore our retirement planning and superannuation strategy services.