Planning for & Living in Retirement

When it comes to retirement, everyone's idea of their ideal retirement is different. To make sure you’re on track for the retirement lifestyle you want, you need to start with a plan that clearly identifies your goals. As you think about what your retirement goals are, you may also want to consider these important questions:

  • When do you want to retire?
  • How much is enough to retire on?
  • How will you generate that money?
  • Will your money run out?
  • Would you be able to live on the age pension?

Deciding when to retire is a big decision and can come down to a number of factors such as:

  • Your readiness to stop working
  • The age you can access your super
  • Whether you have enough money to retire
  • Your health
  • How much debt you have.

How much will you need?

The amount of money you’ll need in retirement will depend on the retirement lifestyle you want.

But there are a few other things to think about:

Will you still have debts or will you be debt-free by retirement?

Whether it’s your home loan or other debts, think about whether you want to pay these off or if you’d be better off paying more into your super.

What are your medical expenses likely to be?

Some estimates indicate the average retiree spends nearly $60,000 on healthcare in retirement, but most of that is in the later years of retirement when health deteriorates.

Will you have any dependents?

With couples starting to have families later, it’s possible to still have children at school or university when retirement approaches. And with longer life expectancies, it’s also possible for retirees to be providing for ageing parents.

What will your partner want to do in retirement?

Does your retirement goal align with theirs or do you have two completely separate lifestyles to fund?

Everyone’s retirement goals are different, but it’s useful to think about whether you’ll have enough retirement income super for the lifestyle you’re planning live.

What if you don’t have enough?

If you’re close to retirement and worried about not having enough assets to fund the retirement lifestyle you want, you may want to think about these options:

Delay your retirement

  • It will give you more time to add to your super or other investments.
  • Retiring after 60 will mean you can withdraw your super tax-free.
  • It could increase your super balance without compromising your income.

Review your investment strategy

  • Your investment strategy should reflect the time you have until retirement.
  • Reflect on your investment portfolio and what type of investor you are.

Review your personal budget

  • Adjust your budget and cut back on discretionary expenses.
  • Compare your budget to what ASFA considers to be modest and comfortable lifestyles in retirement.

Find alternative ways to fund your retirement

  • Downsize your home and invest the money left over.
  • Sell other assets.
  • Consider a reverse mortgage.

The age pension. Is it enough for you?

In most cases, the age pension may not be enough to fund a comfortable retirement. But, it can play an important role by allowing you to qualify for the pensioner concession card, so you can save money on prescriptions, utility bills, council rates and other personal expenses.