Prepare to retire

Preparing to retire is emotional and practical. Making a retirement plan can help you manage your finances, and cope better as your life and priorities change.

Prepare to retire

Make a retirement plan

Your retirement plan can be simple or detailed. Include:

  • Timing — when you want to retire. This could change, but it’s good to have a starting point.

  • Lifestyle and priorities — prioritise what matters most. For example, social activities and staying active, continuing or changing work, where you will live.

  • Income and living costs — estimate your daily living costs. Do a budget to prioritise your spending. Work out how much income you’ll have, and from where.

  • Plan for the future — if you can, boost your retirement income by contributing more to your super. Decide how to pay off your mortgage or other debts, and build a savings buffer. Check you have an up-to-date will and powers of attorney.

Think about when you want to retire

There’s no set age you need to be to retire. It will depend on your health, work options, finances and personal situation.

Are you retiring in ten years, two to five years, or next year? If you have a partner, when will they retire? Knowing how much time you have helps you make a retirement plan.

Talk about your retirement priorities with a partner, colleague or friend. If you need professional advice to plan for retirement, speak to us.

Consider your lifestyle and priorities

Set your priorities

Think about what your lifestyle will look and feel like. What are the things that matter most?

Consider:

  • your living costs

  • social life and recreation

  • staying active and healthy

  • volunteering or community participation

  • planning for changing health needs or aged care

  • supporting your family, children or grandchildren (if any)

Keep working, reduce hours or retrain

Continuing to earn an income, even part-time, can help your retirement savings last longer. If you want to keep working, options include:

  • Job Switch — explore options to retrain or seek part-time work

  • Transition to retirement — if you’ve reached your preservation age, you can use some of, and keep contributing to, your super while working

  • Work Bonus — if you get the Age Pension, you can earn up to $300 per fortnight from work before your pension payment reduces

Plan where you will live

If you own your home:

  • If you still have a mortgage, you could use some of your super (when available) to pay it off.

  • Consider downsizing to free up money. You could pay off your mortgage, support your lifestyle, or relocate to be closer to family or services. Before going ahead, check the tax impact and whether it will affect your government benefits.

If you’re renting:

  • You may be eligible for an extra payment if you rent and get payments from Centrelink, like the Age Pension. To find out more, see rent assistance on the Services Australia website.

Work out your income and living costs

How much money you’ll need for living costs in retirement depends on your lifestyle priorities and what you can afford.

For most people, your retirement income will be a combination of superannuation and the Age Pension. If you don’t have much super, you may be more reliant on the pension. If you do have super, think about how and when to withdraw it. You may also have some savings or investments.

Work out your living costs

Consider:

  • Housing — rent or mortgage, rates, home and contents insurance, maintenance

  • Utilities — electricity, gas, water, phone, internet, streaming services

  • Food — fresh food, groceries, takeaway, dining out

  • Clothing and household goods — clothing, personal care, furniture, household appliances

  • Health and leisure — health insurance, health care, social activities, fitness, holidays, gifts

  • Transport — car registration, insurance and running costs, public transport

As a rule of thumb, try allowing for two thirds of your current living costs. This is a useful guide, that assumes reduced costs for work and that you’ve paid off your mortgage.

Your spending may be higher when you first retire. For example, if you plan to travel or update your home. You may also need to allow more for health care as you get older.

Get your super income

You can get your super when you retire and reach your ‘preservation age’. That is between 55 and 60, depending on when you were born.

When you are eligible to withdraw your super, your main options are:

  • an account-based pension

  • an annuity

  • a lump sum

  • or a combination of these

You could also consider a transition to retirement strategy. You can use some of, and keep contributing to, your super while working.

Contact your super fund to discuss your options.

Claim government benefits

From age 67 (or earlier, if born before 1957), you may be eligible for government benefits such as:

  • Age Pension

  • Pensioner concessions

  • Health care benefits

  • Tax offsets

For questions about government benefits, call Centrelink’s older Australians line on 132 300. Ask to speak to a Financial Information Service (FIS) officer (for free). The helpline is open Monday to Friday, 8:00am to 5:00pm.

Add in savings and investments

If you have money in savings, this could top up your retirement income.

If you have investments like shares or investment property, think about whether to keep or sell. Check the costs, tax impact and whether it will affect your government benefits.

Plan for the future

Grow your income

If you can, consider contributing more to your super. 

Save for an emergency

Save an emergency fund to give yourself a safety net for unexpected bills like repairs or medical costs.

Pay off debt

If you have a mortgage or other debts, consider how best to pay them off. For tips on how to do this, see get debt under control.

Make an estate plan

Decide what you want done with your assets when you die. Check you have an up-to-date will and powers of attorney, and a nominated beneficiary for your super.

Get help if you need it

  • To get advice about your super income options, contact us or talk to your super fund.

  • For questions about government benefits or retirement, call Centrelink’s older Australians line on 132 300. Ask to speak to a Financial Information Service (FIS) officer (for free). The helpline is open Monday to Friday, 8:00am to 5:00pm.

  • To get professional advice on planning for retirement, speak with us.

  • For help with tax matters, contact a tax professional.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/retirement-income/prepare-to-retire

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

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CFP® Dip FP
Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.