This step-by-step guide will help you understand the rules when it comes to accessing your super and ensure you know how much retirement income you’ll have to spend. It will also help with planning the non-financial side of your retirement.
Retirement is getting close now, so it’s time to ensure you have a detailed plan in place and everything is properly prepared.
Preparing to retire
1
Set the date for the start of your retirement (6–8 minutes)
- Review your planned retirement date and decide whether it’s still right for you given your current personal circumstances.
- Talk to your partner and family to ensure they’re happy with your retirement plan.
- Review whether you have any work goals you still want to achieve.
- Consider whether you want to retire completely, or continuing working a few days a week.
- Think about whether you want to take any long-service, annual, or even extended unpaid leave you have before you retire permanently.
- Talk about your retirement plans with your employer.
- Update any skills you have that could be useful for earning extra income in retirement if you need it.
- Establish a timeline for your retirement so you can prepare a list of tasks to complete before the big day.
2
Work out your financial position at retirement (9–11 minutes)
- Take stock of your current financial situation and start preparing a balance sheet showing your financial position at retirement.
- Login to your super account and check how much you currently have in your super account.
- Ask your super fund to provide an estimate of your super balance at your planned retirement date.
- Estimate how much your other financial assets like shares or investment properties (if any) will be worth when you retire.
- Add up all your outstanding debts (including your mortgage) and other any financial liabilities.
- Subtract the total of your debts from your financial assets to work out your likely net financial position at retirement.
- Develop a plan for paying off any existing debts – either before or after retirement.
- Revisit your planned retirement date. Think about whether you can still afford to retire at that time, or whether you will need to work a bit longer to pay off debts or accumulation more super.
- Consider speaking to a financial adviser if you’re concerned about your income in retirement.
3
Calculate your likely income in retirement (8–10 minutes)
- Work out what income you can expect to receive in retirement from your super and other financial assets.
For your super account, check out SuperGuide’s Super to income reckoner tool. Or use the ASIC MoneySmart online retirement planner tool to create an estimate. - Explore other ways to generate income in retirement.
- Think about whether you plan to sell any of your financial assets at retirement, or keep them to provide some income (such as rent) in retirement.
- Estimate how much income you’ll have receive in retirement if you intend to use your super to pay off your debts.
- Decide if you need to add some last-minute contributions to your super to generate more retirement income.
- Work out which type of super contributions would be best to use.
4
Prepare your retirement budget (7–9 minutes)
- Investigate how much you are likely to spend food, clothing and household items in retirement. Check out the ASFA Retirement Standard for current figures for the average retiree.
- Develop a clear budget for your retirement spending, including regular bills, holidays, home maintenance and healthcare costs.
- Ensure your partner agrees with the budget you set. Read some tips for improving your retirement budget.
- Decide whether you’ll buy an annuity or take your super as a lump sum, super pension, or a combination of both.
- Think about the different investment options available if you plan to take a super pension or buy an annuity.
5
Verify the rules and check you’re ready to go (9–11 minutes)
- Recheck when you can access your super using SuperGuide’s Retirement age calculator.
- Recheck all the conditions of release if you’re under age 60 or seeking early access to your super.
- Estimate the tax you’re likely to pay on your super savings when you retire under age 60, or at age 60 and over.
- Investigate the current Age Pension rules.
- Estimate the current value of your assets and income to see if you (or your partner) will be eligiblor the Age Pension.
Check SuperGuide’s Age Pension Calculator to find out how much you could receive. - Explore whether you’ll qualify for the Pensioner Concession Card. Even if you only qualify for a small part-Age Pension, you could still get the card.
- If you are not eligible for the Age Pension, investigate current eligibility rules for the Commonwealth Seniors Health Card (CSHC).
- Apply for the Seniors Card in your home state to access a range of money-saving benefits, including cheaper public transport.
6
Get your lifestyle ready for retirement (8–10 minutes)
- Decide whether your current home is still suitable for your retirement lifestyle, or whether you’ll need more or less space.
- Assess your home to see if it needs any major renovations or maintenance.
- Decide whether to undertake any necessary renovations or maintenance while you still have a regular income.
- Check whether your car needs replacing and consider when the best time is to do it.
- Collect information on any retirement travel you have planned.
- Think about how you plan to keep your mind active and engaged in retirement.
- Investigate opportunities for further education such as short and online courses.
- Get a thorough health check to identify any potential health problems.
- Review the insurance provided through your super fund and decide if you will need different cover in retirement.
- Review your current health insurance policy to check whether it remains appropriate.
You’re now ready to hit retirement running. The next task is to learn about starting retirement. When you’re ready to take the plunge, click on the button below.
