Can the average Australian retire before the age of 65?

In recent years the FIRE method (Financial Independence, Retire Early) has been growing in popularity. The idea is that FIRE investors will put as much of their income as possible into investments in the hopes of attaining financial independence at a young age and be able to maintain their wealth for the long term. The goal is to live off their investments and enjoy an independent lifestyle without the need for traditional income. While the FIRE method has its own pros and cons and won’t be for everyone, the idea of retiring as early as possible sounds good to most of us.

If your aim is to retire early (meaning before you can access your super), you’re going to need money outside of super. The average life expectancy of Australians continues to increase, so you can expect to spend a few decades in your retirement years. The Association of Superannuation Funds of Australia (ASFA) considers the super balance required for a “comfortable” retirement to be $595,000 for singles and $690,000 for couples. If you can’t always build wealth with a salary, then investing may be the path to early retirement.

There are a lot of options, methods, questions, and confusing answers in this area. If the movies are anything to go by, it can feel like the wrong choice could spell financial ruin. Below are some common investment types to consider.

Cash and fixed interest investments

Yes, those savings accounts and term deposits are a form of investment. The advantages of savings accounts and term deposits are that you are unlikely to lose money, as cash is considered a very conservative, low risk option.

The interest you earn each year can fluctuate, but you won’t get a negative return. You also have access to this money should you need it. However, inflation means the real value of cash will lower over time, which is something you'll need to factor in.


Property is often seen as being less risky or volatile than other forms of investments. If your property increases in value, you can benefit from a capital gain when you sell. Most expenses can be offset and some people like being able to physically see their investment.

Although there is a lot of value in the asset, you can’t access any of it quickly if you need to. Some people may prefer an investment option that is easier to liquidate. There is also generally a large upfront cost. If your rental income doesn’t cover the loan, interest rates increase or your property stands vacant for a period, you could have some out-of-pocket expenses.

Shares, managed funds and ETFs

Buying and setting up shares is no longer just for suits in the business district. Managed funds and ETFs (exchange-traded funds) function much in the same way as shares but are generally lower cost. You don’t need a lot to get started, and can build up over time. You can set them up yourself and chose your own, seek the services of a professional investment broker, or select from a range of ready-made portfolios from investment providers.

These options allow for more diversification than cash or property, so you can hold investments in a range of options and levels of risk. A drawback is that, if you choose higher risk options, there is a good chance at some point you may receive a negative return. There are also possible costs including brokerage fees, an annual fee (typically a set percentage of the value) or transaction fees for buying or selling.

So, can the average Australian retire before 65? With careful planning it’s not so far-fetched.

How you go about investing will depend on you, your circumstances, the money you have available and what level of risk you’re comfortable with. If you want to dip your toe in but you are unsure, you can always seek the advice of a professional financial adviser.

Note: It’s important to remember that no matter the investment, you will likely have some tax obligations. There are a lot of rules around tax and investments. You can check with the ATO for a professional financial adviser for more information.

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General non-advice disclaimer

The information contained in this article is of a general nature, is provided for education purposes only and does not constitute financial advice. It has been prepared without taking into account your particular financial circumstances or objectives. You should consider the appropriateness of the information as it relates to you. You may wish to consult an adviser before you make any decisions relating to your financial affairs.

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