Retirement income planning
If you are at the crossroads and thinking about retirement, here
are some things you can do to secure your financial future.
Take control of your
The earlier you start preparing for retirement, the more options
you have to set a course that suits you.
The next thing to do is to sort out your finances. Work out how
much money you have now, how much you might have in the future and
where it is coming from.
Get on top of your finances by finding out:
- What assets (house, savings, investments) you have and how much
they are worth
- How much super you have and when you can access it
- When you can apply for the age pension and whether you are
likely to be eligible
and pension age calculator
security for more information on the age pension.
Use our retirement planner to estimate your future income from
your super and the age pension.
Make a long-term financial
The next step is to look at how your needs might change over
time. For instance, in the first few years of retirement, you might
want to travel or take up a new hobby. Later, you may want to
replace your car or renovate your kitchen. Further down the track,
you may want to move into a retirement village.
Think about how you can use your different income sources to
fund the different stages of your life. The important thing is to
plan for the long term, not just the next 5 years. Seek financial
advice or speak to a Department of Human Services' Financial Information
Service officer if you are unsure what to do.
Case study: Marcus and Mei-Ling make a financial plan
and Mei-Ling are both 57 and plan to retire in 2 years. They have
come up with a plan to use their different sources of income to pay
for things at different stages of their retirement.
For example, they have $20,000 in a savings account for a big
holiday in the year they retire. Their super money will be used to
pay for living expenses until they are old enough to get the age
pension. After that, they will live off a mix of super money and
the age pension.
If Marcus and Mei-Ling live past 90, they will probably have
used up their super. They know they could then use the equity in
their home to supplement the age pension.
Find ways to grow your
Ask any retiree what they fear the most and chances are most
will say 'running out of money'. But there are ways to stretch your
retirement income and things you can do to make your money last as
long as possible.
Get advice as early as you can
Managing your finances can be hard work even if you have some
financial knowledge. Ask for financial advice if you need help with
investment strategies and to navigate our complex tax system. Ask
your adviser to explain different investment strategies, the level
of risk involved and the potential returns you can expect.
Diversify your investments
With many retirees living up to 90 and beyond, it's a good idea
to invest at least some of your money in assets that will grow over
time, like shares
and property. This
will help ensure your capital will grow in value to keep pace with
inflation and your income needs. Spread
your investments to avoid financial heartache in the future.
Manage your spending
A simple way to make your money last longer is to watch your
spending. Use our budget planner to help you save for special items
and keep your expenses in check. Do you want to splurge straight
after retirement then spend 20 years living on bread and water?
Take advantage of your entitlements
Even if you don't get the age pension, you may be eligible for
other benefits, such as travel concessions, cheaper medicines and
reduced council and water rates. The Seniors Card will also give
you discounts on travel and some retail services. See our list of
senior's concessions in over 55s - your money.
Also see the Department of Human Service's Commonwealth Seniors
Health Card webpage for more information.
Keep on working
By continuing to work, you can leave your savings untouched for
longer while adding to your super. The government has incentives to
encourage people to work past the pension age. Find out how part-time
employment can extend your retirement funds. You can also transition to retirement.
Read our booklet
decisions at retirement booklet explains:
- When you can withdraw your super
- Your retirement income stream choices and investment
- The benefits and drawbacks of a transition to retirement
- Your options of taking a cash lump sum or starting an income
- How to get trustworthy retirement information and guidance
Financial advice is
recommended when it comes to managing your money in retirement. By
planning ahead and staying in control of your finances, you can
enjoy a safe and comfortable retirement.
Last updated: 12 Oct 2016