My retirement planning diary (Part 6): Light at the end of the tunnel

Even though my super balance is looking much healthier than it did in April, I’ve used the last six months to pause and revise my retirement plan and share the process with you.

In the first five instalments of this diary, I:

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• Tried not to panic at the sight of my shrinking super balance and considered my options
• Took a closer look at my super fund and whether my investments still matched my tolerance for risk
• Worked out how much I’m likely to spend in retirement and set my target annual income
• Test drove some retirement income calculators to see if my super is still on track and looked at other potential sources of income, including my home equity
• Thought more deeply about the non-financial aspects of retirement – how I want to spend my time and what would give my life meaning and purpose – with the help of a retirement coach.

Now I have a life plan to go with my financial plan, it’s time to set the date, consider my retirement income options and the steps I need to take to implement my strategy.

First though, I promised to report back on my experience of financial advice from my super fund.

Financial advice from my super fund

After contacting my super fund with questions about my preparations for retirement, the person in the contact centre suggested I make an appointment with one of the fund’s licensed financial advisers.

I was given a free, one-hour slot for a phone meeting two weeks later and told what information to have on hand.

The main issue I wanted to address was how to go about using a recontribution strategy to minimise the tax payable by my nominated beneficiaries on any money left in my super account when I die. I was told that it was an estate planning issue for which I would need to pay for advice (estimated cost starting at $2,600) and book another session.

I also wanted an estimate of any retirement bonus I might be eligible for. This is a refund of money put aside by the fund to pay capital gains tax on future asset sales, as capital gains are tax-free in retirement phase. Many funds offer a retirement bonus (which may go under a different name, depending on the fund) as an incentive to stay with them and start a pension account.

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I estimate this could add a few thousand dollars to my account balance if I open a pension account with my fund, but the calculation is vague and neither the call centre nor the financial adviser could help with an estimate.

They also couldn’t tell me if I would lose any retirement bonus if I were to withdraw my super balance and immediately recontribute it (recontribution strategy), to reduce the death benefits tax.

Perhaps someone who wanted simple product information may have found the advice helpful, but I was underwhelmed. The adviser seemed to be reading off fact sheets about starting a super pension and the products available, information that was readily available on the fund’s website.

Regulatory changes are making it easier for super funds to provide affordable advice to members, but a lot more can be done to help them navigate the shift into retirement. The advice on offer from my fund (others may be doing it better) was formulaic and not flexible enough to meet my needs.

A firmer foundation for retirement

The good news this year has been the remarkable rebound in global markets and hence in super fund returns. Even so, I’m glad I took the opportunity to revise and firm up my retirement plans.

My super balance is back on track, but I’m still planning to delay retirement until next year to provide a buffer for unexpected spending and the possibility of lower super fund returns.

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There’s still plenty I can do in the lead-up to make the transition easier.

Next steps

Belatedly, as I’m over 65, I’m going to transfer the bulk of my super balance into an account-based pension where earnings are tax free. In the 2025 financial year, the median Growth pension fund returned 11.5%, a full percentage point higher than the median Growth accumulation fund at 10.5%.

While I will be required to withdraw a minimum of 5% of my pension account balance this financial year (on a pro rata basis), I can recontribute any income I don’t need straight back into my accumulation account and claim a tax deduction.

When I do finally retire, I can commute (roll back) my pension account and combine it with the balance of my accumulation account, then start a new pension. Yes it’s convoluted, like so much in our super system, but potentially worthwhile.

And thanks to my retirement coaching sessions, I’m going to act on some of the activities I was putting off until I stop working. No more procrastinating!

I’ve booked bridge lessons with a friend and will start piano lessons next term. As you read this, I’m soaking up the windswept atmosphere of the Faroe Islands, seeking inspiration for my writing and trying not to get blown off a clifftop.

Life is short, so why wait to enjoy it?

And that means I’ve come to the end of my retirement diary, even if I’m not there yet. Thanks for reading and I hope it’s been of help to any of you who are also making this huge life transition, even if only to learn what not to do.

Barbara