Retirement isn’t won on your last day at work. It’s won in the five years before it.

That final stretch is where small decisions can snowball into six-figure differences in your retirement savings. Get it right, and you’ll likely enter retirement with confidence. Get it wrong, and you could spend decades wishing you’d planned a little better.

Here’s why those last five years matter so much.

Your super is usually at its biggest

For most Australians, their super balance is higher than it’s ever been during the final years before retirement. That’s important because investment returns work in percentages.

A 10% return on a $100,000 balance earns $10,000. The same 10% return on a $700,000 balance adds $70,000.

In other words, your super is finally big enough for compounding to do some serious heavy lifting. Every extra contribution and every positive year in the market can have an outsized impact on your retirement balance.

You’re still adding to the pile

There’s another powerful force working in your favour. If you’re still employed, your employer continues making compulsory super contributions.

Those contributions, combined with investment earnings, mean your nest egg for retirement is still growing.

The moment you retire, that process flips. Employer contributions stop. Instead of adding money, you begin withdrawing it to fund your lifestyle.

Many Australians underestimate just how significant that transition is.

Mistakes become far more expensive

Early in your career, poor investment decisions can often be recovered over decades.

Five years before retirement? Not so much. Taking excessive risks in search of higher returns could leave you exposed to a major market downturn just before you stop working.

On the other hand, becoming too conservative too early could mean missing years of valuable growth. Finding the right balance between protecting your wealth and continuing to grow it becomes increasingly important.

This is when retirement planning becomes real

It’s also time to move beyond simply checking your super balance.

Ask yourself some practical questions. How much income will you actually need for retirement? Will you receive a full or part Age Pension? Should you pay off debt before retiring?

Would a transition-to-retirement strategy help you reduce your working hours while keeping super contributions flowing?

These aren’t decisions you want to leave until your farewell morning tea.

Don’t overlook the emotional side

Many people spend years planning their finances but almost no time planning what retirement will actually look like.

Leaving full-time work is one of life’s biggest transitions. Some people thrive. Others quickly discover they miss the routine, purpose, and social connection that work provided.

That’s why many Australians are choosing a gradual retirement instead of stopping overnight. Working part-time for a few years can ease the financial pressure while making the lifestyle adjustment much smoother.

Foolish takeaway

The final five years before retirement aren’t simply a countdown. They’re an opportunity.

It’s your last chance to boost your super through employer contributions, salary sacrifice, or voluntary contributions while giving compounding one final opportunity to work its magic.

Retirement isn’t determined by one spectacular investment or one lucky year in the market.

More often than not, it’s the decisions you make in those final five years that determine whether you spend retirement worrying about money, or enjoying the freedom you’ve spent decades building toward.

The post Why the 5 years before retirement could make or break your future appeared first on The Motley Fool Australia.

More reading

• Where to invest $10,000 in ASX 200 shares in July
• How to make $50,000 of passive income from ASX shares like CBA
• How much superannuation do I need to retire comfortably at age 64?
• The ASX ETF market is set for a record year – Here are the best performers so far in 2026
• What’s the average Australian superannuation balance at ages 60 and 65?

Commonwealth Bank of Australia (ASX: CBA) has long been one of the first names investors think about when it comes to ASX dividends.

It is large, profitable, widely held, and has a long history of paying fully franked dividends.

But how much would someone need invested in ASX shares like CBA to make $50,000 a year in passive income?

Let’s take a look.

Start with the income target

A $50,000 annual passive income target works out to about $4,165 per month.

That is a sizeable amount of money. It could help cover living costs, mortgage repayments, rent, insurance, holidays, or retirement spending.

The amount needed to generate that income depends on one key number: the dividend yield.

If a portfolio of ASX dividend shares produced an average yield of 3%, an investor would need around $1.67 million to generate $50,000 a year.

At a 4% yield, the required portfolio falls to $1.25 million.

At 5%, it would be $1 million, and at 6%, the portfolio would need to be around $833,000.

That shows how the dividend yield can make a big difference.

Why not just chase the highest yield?

It is tempting to look at those numbers and aim for the highest dividend yield possible.

But that can be a dangerous strategy.

A very high yield can sometimes be a sign that the market expects the dividend to fall. After all, if it were guaranteed, investors would be piling all their money in, driving the share price higher and narrowing the yield on offer.

A share yielding 8% today is not much help if the dividend is cut heavily next year.

That is why shares like CBA often remain popular with income investors. The yield may not always be the highest on the ASX, but investors are also paying for scale, profitability, franking credits, and a long record of returning cash to shareholders.

Building around CBA shares

CBA shares could be part of a passive income portfolio, but they probably should not be the whole portfolio.

Even a high-quality bank is still exposed to the housing market, credit growth, bad debts, interest margins, regulation, and the broader economy.

A better approach could be to combine bank dividends with other types of income shares.

That might include infrastructure shares such as Transurban Group (ASX: TCL), energy infrastructure through APA Group (ASX: APA), supermarkets such as Woolworths Group Ltd (ASX: WOW), or property income through listed real estate investment trusts like HomeCo Daily Needs REIT (ASX: HDN).

This gives the income stream more ways to hold up if one sector has a difficult year.

The real goal

Making $50,000 a year from ASX dividends is possible, but it usually requires a sizeable portfolio and a sensible balance between yield and quality.

A portfolio yielding 4% would need about $1.25 million. A portfolio yielding 5% would need about $1 million.

Those numbers may look large, but they show the value of starting early and letting compounding do more of the work.

For example, investing $1,000 a month into ASX shares and earning an average 10% annual return (not guaranteed but a fair target) would turn into approximately $1.25 million after 25 years.

Shares like CBA can play an important role in that journey, but the best passive income portfolios are usually built on more than one dividend payer.

The post How to make $50,000 of passive income from ASX shares like CBA appeared first on The Motley Fool Australia.

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• 3 top ASX 200 shares I’d buy for a self-managed superannuation fund
• I’d buy 4,068 shares of this ASX stock to aim for $200 a month of passive income
• How much do I need in my superannuation to earn an annual $60,000 passive income?
• Buy, hold, sell: Coles, Woolworths, Wesfarmers shares

Motley Fool contributor James Mickleboro has positions in Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group and Transurban Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you planning to retire at age 64? If so, do you know if you have enough superannuation to fund the comfortable lifestyle that you want?

After all, at this age, retirement is very possible. At age 64, you’ve already passed the preservation age of 60. You’re also only one year from the average retirement age, and three years from potentially receiving the Age Pension payment.

Let’s break down what a comfortable retirement looks like. Then dive into what it might cost you to retire comfortably at age 64. Then you can figure out if your super is on track.

Here’s what a comfortable retirement looks like

In Australia, retirement is generally split into two categories: a modest retirement and a comfortable one. 

According to the Association of Superannuation Funds of Australia (ASFA), a comfortable retirement is defined as one that enables retirees to maintain a good standard of living well beyond the Age Pension. 

It budgets for expenses including top-tier private health insurance, regular leisure activities and the occasional meal. It allocates funds for home repairs or renovations, and perhaps even an annual holiday.

Meanwhile, a modest retirement is defined as being able to cover expenses just slightly above the full Centrelink Age Pension provisions from age 67. 

How much will it cost me?

In order to retire comfortably at age 67, ASFA estimates that you’ll need to allocate around $55,923 per year if you’re a single Australian living alone. A couple living together will need $78,566 per year.

These figures also assume you’ll receive a part Age Pension. They also assume you own your home in full, and that you’ll be able to create and stick to your financial goal. 

In order to fund this type of comfortable retirement, ASFA calculates that single Australians will need around $630,000 in their superannuation. Meanwhile, couples will need around $730,000.

Obviously, the catch is, if you’re planning to retire three years earlier at age 64, these figures don’t quite work. You’ll need to allocate extra savings to fund those three extra years.

Ok, so how much do I need in my superannuation at age 64 to retire comfortably?

I’ve done the math for you, using ASFA’s figures, to work out what you should aim to have in your superannuation by age 64.

Singles should aim to have closer to $727,000 in their superannuation and couples closer to $1.02 million at age 64.

Remember also, these figures assume you won’t need to pay mortgage or rent bills in retirement. So if you don’t own your home outright, you’ll also need to factor in these costs too.

The post How much superannuation do I need to retire comfortably at age 64? appeared first on The Motley Fool Australia.

More reading

• How to make $50,000 of passive income from ASX shares like CBA
• The ASX ETF market is set for a record year – Here are the best performers so far in 2026
• What’s the average Australian superannuation balance at ages 60 and 65?
• Should you buy, hold, or sell Wesfarmers shares?
• Does Macquarie rate BHP shares a buy, hold or sell right now?

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.