Retirement income planning

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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 finances

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

Super and pension age calculator

See social security for more information on the age pension.

Use our retirement planner to estimate your future income from your super and the age pension.

Retirement planner

Make a long-term financial plan

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

" "Marcus 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 retirement income

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?

Budget planner

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.

Retirement planner

Read our booklet

Financial decisions publicationOur Financial decisions at retirement booklet explains:

  • When you can withdraw your super
  • Your retirement income stream choices and investment options
  • The benefits and drawbacks of a transition to retirement pension
  • Your options of taking a cash lump sum or starting an income stream
  • 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.

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Last updated: 12 Oct 2016