Retirement is more than just finishing work – it’s the opportunity to live life on your terms. Travel, time with family, enjoying new hobbies, and more. Yet, the lead-up to retirement can feel overwhelming, particularly if you’re unsure about superannuation, government entitlements, or budgeting for a comfortable lifestyle. With thoughtful planning, your retirement years can be both fulfilling and financially secure.
We’ve distilled retirement planning into eight key steps, with each having a significant impact on your retirement income and lifestyle.
Step 1: Visualise Your Retirement Lifestyle & Goals
The first step is to consider what you genuinely want your retirement to look like. Do you dream of travelling across Australia or overseas? Perhaps you’d prefer spending more time with family, taking up volunteer work, or perfecting your favourite hobby. Everyone’s retirement will be different, but you can’t map out a plan without knowing your destination. Start by listing your main priorities. Ask yourself if you plan to continue working part-time after reaching preservation age (the age you must reach before you can access your super, which depends on when you were born), or if you’d like to stop work entirely.
Remember, your desired lifestyle shapes how much money you’ll need in retirement. For instance, regular travel requires a large financial buffer, while downsizing your home could free up funds for other pursuits. If you share your life with a partner, have an open discussion about your retirement timelines. This helps you pinpoint exactly when you’d each like to stop working and whether part-time or flexible hours might be an option. Good communication will help align your financial and lifestyle goals.
This step also includes contemplating big-ticket items or renovations you might want to tackle while you’re still earning a steady income. Buying a new car, updating appliances, or fixing up your home can be more comfortable when a regular income is still in play. Once you have a clear vision for your retirement lifestyle, you can prioritise your financial decisions accordingly, making sure you use the remaining working years to set yourself up for success.
Step 2: Know When You Can Access Your Super
The ability to dip into your superannuation is a significant milestone. Access to super typically depends on your preservation age (between 55 and 60, depending on your birth date) and whether you’ve formally retired. After age 60, you can generally access your super once you’ve permanently left work – even if that means finishing up with just one employer. By the time you reach 65, you can draw on your entire super balance, regardless of your employment status.
However, it’s also worth considering that you may not want to fully retire right at 65 or once you reach your preservation age. For those who prefer a gradual transition, you can potentially access some of your super while you continue to work. This approach, often called a Transition to Retirement (TTR) strategy, allows you to ease into reduced hours without sacrificing income entirely. By drawing a small amount from your super, you can maintain a comfortable lifestyle while phasing out of the workforce at your own pace.
If you anticipate retiring earlier or later than standard retirement ages, keep in mind that your eligibility to access super might be affected by ongoing employment and specific legislative requirements, and planning for this possibility is recommended. It’s a good idea to stay informed about superannuation rules and consider seeking professional advice if you’re in any doubt about when you can safely and legally withdraw your funds.
Step 3: Estimate How Much Income You’ll Need
Once you have a sense of when you can access your super, you must figure out how much you’ll need to maintain the lifestyle you’ve visualised. A good rule of thumb is aiming for two-thirds of your current living costs, but you may need more if you’re keen on extended travel or face additional healthcare expenses. Tools like the Association of Superannuation Funds of Australia (ASFA) retirement standard can give you an estimate of typical costs in retirement. If you’re in a couple, adjust your calculations accordingly – two can sometimes live on an income closer to that of a single person, but medical or housing costs may vary if both parties require higher levels of care.
Consider maximising your super if you can. Making voluntary contributions, even in small increments, can significantly boost your balance over time, thanks to compound growth. The tax benefits of super contributions can also help your finances go further. On the flip side, if you’re still carrying a mortgage or other debts, it’s important to weigh up the benefits of boosting super with speeding up debt repayments.
Mapping out your financial needs at this stage gives you a realistic forecast, preventing nasty surprises once you leave work. Estimating your super requirements and potential retirement timeline also provides a framework for deciding to what extent you contribute to super in your final years of employment.
Step 4: Understand Your Retirement Income Options
When it comes to retirement income, super is often the star of the show—but it’s not the only potential source. Many Australians supplement their super with the Government Age Pension, provided they meet the age and residency requirements and pass the income and asset tests. Even part-time work or casual employment may be possible while you receive some pension benefits. Additionally, other assets such as rental properties, share portfolios, or savings accounts can provide further security and diversification.
You don’t necessarily have to withdraw your super in a lump sum. An account-based pension allows you to receive regular, flexible payments while leaving the remainder invested. This is particularly appealing if you want to keep some funds growing in the market. For those still working, a Transition to Retirement (TTR) income account can bridge the gap if you opt to reduce your working hours, letting you maintain or top up your take-home pay. Remember, the right solution for you depends on personal factors like age, desired lifestyle, and current financial situation.
Step 5: Manage Your Insurance Cover
Insurance is another essential consideration in retirement planning. Most super funds provide automatic cover—often Income Protection, Total & Permanent Disablement (TPD) cover, and Life Insurance (Death cover), however super fund-based insurance may not cover everything you need as it isn’t tailored to your unique individual circumstances (more on that here). Also your insurance needs and premiums will almost certainly shift as you age. Maybe the children have moved out, or your mortgage is almost paid off. These changes can mean your existing cover is either excessive or insufficient. For instance, TTR accounts typically don’t include insurance, so some retirees prefer to maintain a separate super account to keep their cover intact. Reviewing your insurance ensures that the impact of future hurdles on your retirement plan, such as disability or serious illness, is reduced.
In short, retirement income can come from multiple streams, and insurance plays a critical role in protecting you from life’s ups and downs. Making informed choices about how and when to draw upon your super, the Age Pension, or other assets allows you to keep greater control over your funds and maintain the lifestyle you’ve worked so hard to achieve.
Step 6: Tidy Up Your Finances
A crucial element of retirement planning is organising your overall finances in a way that supports your chosen lifestyle. For many Australians, that begins with clearing or reducing debt—especially mortgages or high-interest credit cards. Paying these off while you’re still working can be more straightforward than doing so on a fixed retirement income. Think about your big-picture financial arrangements too: do you plan on selling a larger family home and downsizing to boost your super balance? Could a reverse mortgage help you stay in your current property? These decisions will impact your financial position and lifestyle down the track, therefore it’s wise to investigate your options by seeking professional guidance.
Step 7: Consider Your Entitlements
Just as important is ensuring you don’t miss out on valuable entitlements. The Government Age Pension can supplement your super, especially if your funds are modest, but the eligibility rules around income and asset tests can be confusing. If you have a partner who has not reached Age Pension age, shifting some funds to their super account (if appropriate) might help increase your pension benefits. Additional concessions—like the Commonwealth Seniors Health Card—offer reduced costs for prescription medicines and other expenses if you meet the income thresholds, so check whether you qualify. Every saving adds up, and these entitlements can make a real difference to your day-to-day comfort in retirement.
Finally, consider the long-term picture. Do you have an up-to-date will and enduring powers of attorney? Who will inherit your super if something happens to you? Estate planning may not be the most cheerful topic, but sorting it out early can spare your loved ones unnecessary stress later. You may also wish to create an emergency savings buffer to guard against unforeseen expenses—medical issues, urgent repairs, or helping out a family member in need. By tidying up your finances and leveraging the entitlements available, you’ll be well on your way to building a stable foundation for your retirement dreams.
Step 8: Engage a Financial Adviser
While many Australians feel confident navigating the basics of super and budgeting, retirement planning can get complex—especially if you want to optimise tax benefits, structure multiple income streams, or ensure your assets keep growing long after you’ve left the workforce. The final step on your checklist is to seek personalised guidance from a trusted professional. A qualified financial adviser can help you fine-tune your plan, calculate how much you need to draw down from super, and confirm whether you qualify for government support.
At Priority Advisory Group, our Personal & Family Wealth team combines decades of experience with a genuine commitment to our mission: making a positive difference in the lives of our clients. We tailor our advice to suit each individual’s unique goals, ensuring that retirement planning reflects your priorities—whether that’s ticking off a bucket list adventure or staying close to home with family. If you’re ready to take your retirement dreams into a practical, achievable plan, contact us on 1300 349 188 or visit our contact page to arrange a conversation.