‘Flextirement’: a mental wealth plan for retirees

• Many Australians are carefully planning their transition to retirement to ensure a smoother mental adjustment.
• 67-year-old John Simpson initially transitioned to part-time work or ‘flextirement’. He has since embraced his retirement with routines and hobbies he established during this transition.
• AustralianSuper shares top tips for Australians to ease into retirement while considering all aspects of a successful retirement, not just the financials.

7 May 2025 – Rising living costs are one of the main reasons Australians work beyond 65, but recent research reveals that finances are not the only consideration.

According to the Association of Superannuation Funds of Australia¹ more than 70 per cent of working Australians aged 50 to 64 years have no plans to stop completely at retirement. 

Of those aged 65+ and still working, around 25 per cent plan to keep working for social connection and stimulation. 

This is in-line with a shift towards “flextirement” - a growing trend where individuals gradually transition out of full-time work. 

Reinventing retirement: John Simpson’s story²

For John Simpson, retirement was about embracing a new life stage but not necessarily slowing down. After working in financial services for more than 40 years, the then 65-year-old knew he wanted to ease into retirement while building a new routine that kept him engaged and fulfilled.  

“In 2023, I took three months of long service leave before returning to work three days a week – a shift that gave me time to plan for life beyond my career,” John explains.  

“That transition period made all the difference. It helped me ease out of full-time work without feeling like I was losing my sense of purpose overnight.” 

The extra flexibility and time gave John the freedom to dive into new commitments.  

“I spend one day a week caring for my grandchild, I’ve taken on a bigger role in my local hockey club and added an ocean swim with Surf Life Saving members to my weekly routine,” he says.  

With a long-awaited trip to Italy on the horizon in 2025, he’s even started learning Italian. 

“The best advice I’d give anyone approaching retirement is to think of it as a transition, not an end. Easing into retirement through flexible work helped me to establish a new routine to stay socially and mentally active, which is just as important as the financial aspect of retirement”, he says. 

The importance of purpose and social connection in retirement  

Maintaining a sense of purpose and staying socially connected are key to mental wellbeing as we age, but retirement can bring unexpected feelings of isolation.  

AustralianSuper Education Manager, Peter Treseder, says: “Staying engaged – whether through part-time work, volunteering or community activities – can provide structure, social connection and a renewed sense of purpose beyond a career." 

While staying active and connected is crucial, having financial flexibility is just as important, explains Mr Treseder.  

“Flexibility in retirement isn’t just about how you spend your time – it’s about having the financial security to make those choices. A well-planned super balance gives you the freedom to ease into retirement on your own terms.” 

Tips to prepare for retirement in your last working year from Peter Treseder: 

1. Save on tax before retiring: If you have money in the bank from savings, a retrenchment payout, an inheritance, or from the sale of an investment, consider adding it to your super³.  It could then be claimed as a tax deduction and used to reduce your income tax in your last work year, as you may be able to access unused portions of your concessional contributions cap from the previous five financial years.
2. Transition into retirement: Retiring can be daunting and an abrupt end to full-time work can increase doubts and concerns. By moving to part-time work before stopping completely you can experience the extra time you will have on your hands, think about what you are going to do with that extra time, and what will be your long-term routine as opposed to the short term odd jobs around the house that could be done in a few months. You may even be able to access a portion of your super to replace the income you lose by working part-time.  
3. Grow your super while your partner saves on tax: If you earn under $37,000 a year, your partner can add up to $3,000 to your super and get a tax offset of up to $540³. The tax offset gradually reduces as you earn more and stops when your income reaches $40,000. You don’t need to be working for your partner to claim the offset, so it’s a simple way to boost your retirement savings together. 
4. Plan and set up an income stream for retirement: During your working life you probably received a regular income stream, and you managed your finances based on the income stream. To continue that income flow and manage your finances in retirement, it’s possible to set your super up to provide you with a regular income stream. This strategy keeps your money in super where it will continue to receive tax concessions.

With any of the above tips, it’s important to seek professional advice in the lead up to retiring to help map out your financial retirement plan. For more tips and information about planning your retirement, head to the AustralianSuper website.

1. ASFA research retirees' intent to stay flexible, many eye part-time work, October 2024
2. The views expressed are those of the member based on their circumstances, reproduced with their continuing consent.
3. Before adding to your super, consider your financial circumstances, eligibility, contribution caps that may apply, tax issues and when your super can be accessed.