Self funded retirement

2025    |    5min read

Chances are you’ve heard of retirees funding their retirement with a combination of superannuation savings and the Government Age Pension. While it’s what  many Australians do, it’s not the only way you can do it.  

Self-funded retirement is when you use your super, personal savings and returns from investments to fund your life in retirement. Put simply – you don’t need the Government Age Pension. Let’s look at how it works and what support is available if you choose this path.  

What is a self-funded retirement?

Being a self-funded retiree simply means you're paying for your retirement with your own money, without receiving the Government Age Pension. This usually happens when your assets or income are above the limits for government support. But remember - you're not completely on your own. There are still benefits and concessions you might be able to get. 

Understand the tax implications

Tax can be one of the trickier parts of managing your retirement income. As a self-funded retiree, it's important to understand how different types of income are taxed and what tax benefits you can receive. This knowledge can help you arrange your income more effectively and potentially pay less tax. 

Here's what you need to know: 

• Once you're over 60, most money from your super is tax-free, including both regular payments and lump sums 
•  You can earn money from other sources – like investments or work – without having to pay tax. How much you earn before you have to pay tax depends on your situation
• Money you earn from investments outside super is taxed at your regular tax rate, which might affect how you choose to invest 
• When you sell assets like property or shares, you'll pay capital gains tax, though you might get a 50% discount if you've owned them for more than 12 months 
• If you're running a small business in retirement, different tax rules might apply, including some tax benefits. 

Remember that different investment structures are taxed in different ways. For example, money from a family trust is treated differently from owning shares directly. Understanding these variations can help you make better decisions about your retirement income. Get help and guidance from a qualified expert. 

Government benefits you might be eligible for

Even if you can't get the Government Age Pension right now, it's worth knowing what support is available and how your situation might change over time. Many self-funded retirees are surprised to learn they can access various types of government help. 
 

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Make your money work smarter

Making the most of your well-earned retirement means ensuring your savings work smarter, so they can support a lifestyle you love now and in the future. A solid plan should balance what you need (and want) now and your long-term financial security.  

A few things you might want to consider as you work it out: 

• Know your spending patterns and adjust when needed - try tracking your expenses for a few months to see where your money goes 
• Regularly check your investment strategy to make sure it still suits your needs and comfort with risk 
• Plan for both regular expenses and unexpected costs, including keeping some emergency money aside 
• Think about how long your savings need to last, considering things like living longer and healthcare costs 
• Keep up to date with rule changes that might affect your money 
  
  

A Retirement Income account can be a good way to manage your retirement income. It provides regular, flexible payments while keeping your money invested, which could help it last longer. 

To sum it up