In brief
- For 2026–27, the concessional contributions cap is $32,500 and the non-concessional cap is $130,000.
- If your total super balance was under $500,000 on 30 June last year, you can use unused concessional cap amounts from up to five earlier years.
- From age 60 you can start a transition to retirement income stream while you keep working, drawing up to 10% of the balance each year.
- Your will doesn’t automatically cover your super, so check your death benefit nomination.
Why the last ten years before retirement matter
For many people, the ten years before retirement are their highest-earning years. Children may be more independent and the mortgage smaller, which can leave more room to save. Your super balance is also likely to be at its largest, so investment choices, fees and insurance premiums make a bigger difference in dollars.
It’s also when the rules give you the most options: contribution caps, carry-forward contributions, transition to retirement and the downsizer contribution. Using them well takes planning, because each has conditions and limits, and the figures change from year to year.
Contribution caps for 2026–27
Super is taxed differently from most savings. Concessional contributions and fund earnings are generally taxed at up to 15%, and earnings on money in a retirement phase income stream are tax-free, within the transfer balance cap ($2.1 million from 1 July 2026). The caps limit how much you can add each year:
- Concessional (before-tax) contributions, including your employer’s super, salary sacrifice and personal contributions you claim a tax deduction for: $32,500 a year
- Carry-forward: if your total super balance was below $500,000 on 30 June of the previous financial year, you can also use unused concessional cap amounts from up to five earlier years
- Non-concessional (after-tax) contributions: $130,000 a year, or up to $390,000 at once under the bring-forward rule if your total super balance was below $1.84 million on 30 June of the previous financial year
- Downsizer contribution: from age 55, up to $300,000 each from the sale of your home, if you meet the conditions; it doesn’t count towards the other caps
A timeline for the last ten years
Every situation is different, but a timeline helps you think about what to look at, and when:
| When | Focus | Things to consider |
|---|---|---|
| 10 years out | Saving and debt | Pay down expensive debt, use spare contribution cap room, and review your super fees, investment option and insurance |
| 5 years out | Income and estate | Look at transition to retirement, combine super accounts if it suits you, and check your will and death benefit nomination |
| 2 years out | Retirement income | Work out what you’ll need to live on, how much to hold in lower-risk assets, and whether you may be eligible for the Age Pension |
| Retiring | Moving to retirement phase | Start an account-based pension within the transfer balance cap; it must pay at least a minimum amount each year |
Transition to retirement and your estate
Once you reach your preservation age, which is 60 for everyone born after 30 June 1964, you can start a transition to retirement income stream while you keep working. Payments are limited to 10% of the account balance each year, and from age 60 they are generally tax-free. The fund still pays tax of up to 15% on the earnings until the income stream moves into the retirement phase, for example when you turn 65 or retire.
Some people combine a transition to retirement income stream with salary sacrifice, to keep their take-home pay steady while adding more to super. Whether that helps depends on your income, tax and caps, so get advice before you start.
Your super isn’t automatically part of your estate, and your will doesn’t decide who receives it. A binding death benefit nomination tells the fund who to pay. Lapsing nominations must be renewed every three years; non-lapsing nominations, where the fund offers them, don’t expire. Super paid to someone who isn’t your dependant for tax purposes, such as an adult child who wasn’t financially dependent on you, may be taxed.
Your will doesn’t cover your super. Check that your fund has a valid nomination on file, and that it still says what you want.
What to do next
Retirement planning is easier as a series of decisions over several years than as one decision on the day you stop work. Caps and thresholds change each year, so check the current figures before you act.
This article is general information only. It doesn’t take into account your objectives, financial situation or needs. Talk to Wealth Mantra about advice for your situation.
