Make a retirement plan

Your retirement plan can be simple or elaborate. Participation:

• This is when I want to retire. This may change, but it’s a good starting point.
• Lifestyle and Priorities: Prioritize what’s most important. For example, staying active and socially active, continuing to work or changing residence.
• Living Income and Expenses — Calculate your daily living expenses. Create a budget to prioritize your spending. Calculate how much you earned and where you earned it.
• Plan for your future – If you can afford it, increase your retirement income by contributing more to your pension. Decide for yourself how you will pay your mortgage or other debts and build a savings buffer. Check your current will and power of attorney.

Think about when you want to retire

There is no set retirement age. This will depend on your health, employment opportunities, finances and personal circumstances. Would you like to retire in 10 years, 2-5 years or next year? If you have a partner, when will you retire? Once you know how much time you have, you can start planning for retirement.

Talk to your partner, colleagues or friends about your retirement priorities.

Consider your lifestyle and priorities

Think about what it will look like and what your lifestyle will look like. What is most important? considers:

• volunteering or community participation
•  planning for changing health needs or aged care
• your living costs
• supporting your family, children or grandchildren (if any)
• staying active and healthy

Plan where you will live

If your house has:

• If you still have a mortgage, you can use part of your pension (if you have one) to pay it off.
• Consider downsizing to free up cash. You can pay your mortgage, support your lifestyle, or move closer to family or services. Before proceeding, check the tax implications and whether this will affect your government payments.

If you’re renting:

• If you rent, such as the Age Pension, and receive payments from Centrelink, you may be entitled to additional payments.
• If you are having problems with your tenancy or are unsure about your eligibility for a tenancy, see the National Debt Helpline website for tenancy steps you can follow.

Work out your income and living costs

For most people, their pension income will be the combined amount of their pension and pension. If you don’t have a lot of retirement savings, you may end up relying more on your pension. If you have a retirement pension, think about when and how you can withdraw it. You can also save or invest.

Work out your living costs

• 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

When you retire and reach ‘maintenance age’, you can receive a retirement pension. This is between 55 and 60 years old, depending on when you were born. Or when you turn 65, even if you’re still working.

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.

Plan for the future

Grow your income

If possible, consider contributing more to your pension.