Is $1 million enough to retire at 55?

Australian over 50 calculating if $1 million is enough to retire at 55.

Remember the days when $1 million seemed like an enormous amount of money? After all, that made you a millionaire! 

Today, $1 million may not even buy a basic family home in some Australian cities. So, is that sum even enough to retire on? 

According to the Australian Bureau of Statistics, the average age of retirement for the nation’s 4.1 million retirees is 56.3 years. People who’ve reached that age today will need to wait another 10.7 years before being eligible for the Aged Pension. That means they’ll need to rely on their own resources for a few years before receiving government assistance. 

Is $1 million enough to retire at 55?   

That’s a great question. Do you need $2 million or even $3 million to comfortably enjoy retirement? 

The short answer is, ‘How long is a piece of string’? 

In truth, there is no quick and easy answer because so much is dependent on your own personal circumstances. The answer is to ask more questions and seek the advice of a professional financial planner who will guide you through subjects like: 

  • What type of lifestyle would you like to lead? 
  • What are the big expense items you need to budget for? 
  • Are you still paying off a mortgage? 
  • What daily expenses will you still have? 

Planning your retirement while you’re still working has more than financial benefits too, like reducing stress and maximising lifestyle now and into the future. 

Let’s explore some other questions to work out whether $1 million is the sum to aspire to. 

Can you retire at 55?

Sure, you can retire from work whenever you like – so long as you have enough money to support yourself.  

But before you hand in your notice to the boss, consider the reasons why you want to retire and explore some of the alternatives. 

If the daily grind is becoming taxing, you can request flexible work arrangements if you are over the age of 55 and been with the same employer for more than a year. 

You might also want to consider stepping back into a part-time role as part of easing your way to retirement. Enjoying a three or a four-day weekend every single week keeps the income coming in but gives you more time to relax. 

If maximising leisure time is the goal, downsizing from a large family home and garden might be part of the solution.

Learn the seven signs that tell you when is the right time to downsize. Do you know the seven signs that tell you it’s the right time to downsize?

Australian over 50 looking up their super account balance.

Can I access my super at 55?   

If you were born before 1960, you could access your superannuation from the age of 55. However, those born later that decade will have to wait a bit longer. For example, if you were born after 1 July 1964, the preservation age is now 60.

Only if you have a permanent incapacity can you access your superannuation early. 

Outside of that terrible circumstance, it means that if retiring at 55 is your goal, you will have to generate wealth outside of the superannuation scheme to see you through to the age of 60 unless you have that $1 million already sitting in the bank. 

That’s the bad news. 

But there is good news if you want to maximise the amount in your superannuation account before the age of 60. 

Can I still make contributions to super if I retire before age 60?

Yes, you can. Making extra contributions is a great way to maximise your superannuation balance ahead of reaching the preservation age. 

According to the Australian Taxation Office, you can contribute up to $110,000 post-tax income a year into your superannuation account. 

Personal contributions into your superannuation account can be made up until the age of 75, although between the ages of 67 and 74 you will need to satisfy a couple work test requirements

Up until the age of 75, your superannuation fund can also accept compulsory employer contributions. 

Are there any tax implications of retiring in your late 50s?   

Whether you’d like to retire at the age of 55, plan to work another five years to reach the preservation age, or wade through another 12 years to qualify for the pension, it is never too early to speak to a financial planner to help you navigate these waters. 

If circumstances have you accessing your superannuation before the age of 60, you will have to pay tax. Income from the fund will have a tax-free portion as well as taxable portion taxed at the marginal tax rate, less a 15 percent tax offset. 

After the age of 60 proceeds from the majority of superannuation funds are tax free. 


How much does the average Australian have in their super account balance at 55?

Hint: it’s far less than $1 million. 

And the news is worse if you are a woman. 

As of 30 June 2023, men aged between 55 to 59 have an average superannuation balance of $359,100. The average balance in a women’s retirement account is $233,200. 

So, unless you’re already fabulously wealthy, win the lotto, or are left a substantial inheritance by a rich uncle, the chances of retiring on $1 million at the age of 55 is vanishingly rare. 

But that’s not the end of the story.  

If you’re willing to continue working beyond the age of 55, there are things you can do to boost your retirement savings.  

Maximise superannuation contributions

Currently, employers pay 11 percent of ordinary time earnings into your superannuation, and this will increase to 12 percent from 1 July 2025. 

And you can add your own contribution on top of that in one of two ways: 

  • Use post-tax income to add to your super and you may be able to claim a tax deduction as well. 
  • Discuss salary sacrifice with your employer who may be able to make pre-tax contributions to your superannuation account and give you the benefit of paying less income tax. 

Transition to retirement 

You don’t need to access all of your superannuation once you’ve reached the age of 60.  

Depending on your circumstances, you can either access part of your superannuation to reduce your working hours without reducing income, or continue working full time and use transition to retirement provisions to boost your super and save on tax. 

Downsizer contributions

Apart from your superannuation, what is the largest single investment you have? Top marks if you said your family home. 

Did you know that if you are aged 55 and over you can transfer up to $600,000 of the proceeds of the sale of your family home into your superannuation? The Downsizer Super Contribution Scheme gives you the opportunity to substantially add to your retirement bank balance while enjoying a rightsized property with less maintenance to worry about. 

Look for an over-50s lifestyle resort which places emphasis on an active lifestyle with luxury resort-style facilities to enjoy and doesn’t require you to be retired in order to live there. 


Three GemLife residents enjoying their Over 50s resort pool facilities.

How much annual income do you need in retirement?

The rule of thumb regarding the amount of money you need for a comfortable retirement is two-thirds of your current income if you own your home outright.

But a more specific answer is dependent on your individual circumstances. Do you intend to renovate the house? Purchase a new car? Plan a major overseas trip? The answers to these questions and more will inform your decisions. 

So, where does that leave us on the question of needing a $1 million balance for your retirement? 

According to some superannuation experts, you might need a whole lot less to enjoy a comfortable retirement.  

They suggest you might need as little as $235,000. Drawing down five percent of the reinvested balance, combined with the aged pension may put you in an even better position with someone with a larger balance who doesn’t qualify for the pension. 

Again, take the time to do your retirement planning and take advice from qualified professionals before making a decision. 

Group of happy Australians over 50 celebrating a birthday over a meal.

Is there a way to enjoy a retirement lifestyle before retiring?

There is a way to feel like you have retired like a millionaire at the age of 55 even if you are still working. 

Over-50s lifestyle resorts like GemLife offer brand new, luxury homes that are rightsized for modern living and situated in a secure, gated community with high end resort and country club facilities to enjoy. 

You can experience ‘lock-up and leave’ peace of mind when you travel or feel like you’re on holidays at home lounging by the resort pool or making use of the sporting facilities on hand. 

GemLife resorts are located in some of the most sought-after seachange and tree change locations in Australia and offer distinct advantages over retirement villages for active and fit over-50s. 

For more details including an information pack or to book a tour at one of our resorts in Queensland, New South Wales and Victoria, contact our team today.  

Information in this article is general in nature and is based on current information at the time of writing. Before making any financial decisions, seek professional advice.