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How to build your retirement plan (and why you need it)

Retirement Timeline  

One key part of retirement planning is figuring out how long you'll be able to retire.

Ideally, you'll retire right when you want to, but sometimes, you might need to stay flexible to build up your funds and ensure financial security.  

Access to Super and Age Pension – Age Limits  


The age you can tap into your superannuation is your 'preservation age.'

You can access your super at this age if you're retired or have stopped working.

You'll have to wait until 65 to access it if you're still working.  


The Age Pension kicks in at 67.

The amount you get depends on your income and asset values (your home doesn't count).

Due to these limits, not everyone qualifies for a pension.  

Halfway approach – Transition to Retirement 


The transition to retirement strategy is excellent for those who want to avoid drawing down their super all at once from preservation age.

Some people use it to work part-time while supplementing their income, while others use it to boost their super and save on taxes while working full-time.  

Your Time Horizon is Everything  

The amount of time until you start accessing your investments affects your planning.

If you're in your 30s with a long timeline, you can take on the risks of high-growth strategies.

But you might need to be more conservative if you're in your 50s or 60s.  

Nobel laureate Robert Shiller's research on the chances of losing money in the US stock market is insightful.  


Historically, you didn't need to wait a century for positive returns. Since 1926, there's never been a 20-year period where the stock market didn't generate a positive return.  


While stocks usually increase over shorter periods, the odds of positive returns improve the longer your time horizon.  

Retirement Income: Superannuation & Other Income Sources  


Maximise Superannuation Now & Pre-Retirement  

Super is a big part of a successful retirement plan, yet many overlook it.   


Boosting Your Super with Voluntary Top-ups  


Making extra contributions can significantly improve your super savings.

You can do this before tax by increasing employer contributions (concessional contributions) or salary sacrificing up to $30,000 annually.

After-tax (non-concessional), you can contribute up to $120,000 annually.  


Understand Your Investor Profile.  


Know how you have invested your super.

The difference between growth and conservative strategies over 30 or 40 years can be huge.

Closer to retirement, shift investments from growth to defensive.

Superfunds offer a range of investment choices and sector options so that you can balance your portfolio between various asset classes. 


Check your super fund's performance using APRA's performance data.

If you need more help, get advice on your fund's performance or consider changing funds.  




Be aware of your super fund's fees.

Some products have high fees without offering worthwhile returns.

Compare costs to the returns you're getting and what other funds charge.  


Accessing Your Super  


When you reach preservation age, you can access your super.

You can draw a lump sum or set up an account-based pension (a tax-free regular income).

Based on your retirement budget, choose your pension payment amount and frequency.

Consider the minimum drawdown rates and calculate how long your super will last based on your balance, pension, investment returns, and fees.  

Are you eligible for the Age Pension?  


The age pension helps many retirees, but living on it alone can be stressful due to its modest income.

This challenge is more amplified if you live in a high-cost area such as a capital city.

Remember that your pension could be reduced with regular income from investments or work.  

Check your pension eligibility and see if it will be part of your retirement income.

If you are worried about relying on a modest pension, seek advice about boosting your retirement fund.  

Creating an Investment Portfolio  


Consider building an investment portfolio outside of superannuation. Benefits include: 

  • More control over investments. 

  • Access to money before your preservation age. 

  • Creating a legacy for your children or grandchildren. 

It's not required for a sound retirement but is valuable for wealth creation and protection if the government changes the rules or limits on super.

We can be your fiduciary investment advisor if you want expert input for your investment policy.

Understand Your Risk Appetite  


Lower-return investments are safer, while high-yield investments are more volatile.

Your personalised strategies should consider your cash flow, timeline, and risk profile.  

Budgeting Today for Your Future  


Building a solid budget now will set you up for the future.

Based on your retirement timeline, focus on areas needing more support.

If you can pay off more debt or contribute more to super now, include that in your budget.

Using money today compounds more for tomorrow!  

Remember, if you're retired around a quarter of your life, a good portion of your earnings will need to support you during those years.  

Your Retirement Spending  


Planning for retirement isn't just about money; it's about using your resources effectively to enjoy your golden years confidently.  


What Kind of Lifestyle in Retirement Do You Want?  


Thinking about your retirement goals can help you prepare emotionally and ensure you have meaningful activities to avoid boredom or lack of purpose.

Consider what you want to do with your time and energy once you stop working.  


- List important activities or lifestyle choices for your retirement.  

- Consider your housing situation for your retirement years.  

Are there positive life experiences besides work?  

Your Current Lifestyle vs. Retirement Lifestyle  


Use your current lifestyle to set expectations and a budget for retirement.

Determine your current spending and whether you want to maintain that standard of living.  


- Review essential expenses like insurance, housing, groceries, and bills.  

- Add discretionary spending such as travel or dining out.  


Estimating Your Retirement Gaps


Understanding your desired retirement activities and expenses, check the balance of your retirement nest egg.

Factor in future inflation, as $50,000 today won't be worth the same in 10-20 years.

If there's a gap, plan how to reach your retirement income target.  


Review the ASFA Retirement Standard to see where your desired lifestyle fits in the Modest to Comfortable range outlined.

Aim to pay off your mortgage, and consider how long you'll need to support yourself from your savings.  


- Use an online retirement calculator to estimate the value of your retirement fund at your desired retirement age.  

- Note your housing situation and debt status at retirement.  

Retirement Taxes and Dealing with Debt  

Taxation in retirement can be complex.

However, if your finances are simple, you can navigate them easily; otherwise, consult an accountant or fiduciary financial planner.

As fiduciary advisors we use a "tax ladder" approach with our clients to consider their family situation and take advantage of the various tax structures available, including family trusts or investment companies.  

After age 60, you don't need to lodge a tax return if your income is from a pension or taxed income stream.

If you have other investments or are still working, you must lodge a return for that income.  

After the pension age (currently 67), you can also earn a higher income from your investments before you pay any tax due to seniors' tax offsets.  

Retirement Legacy and Estate Planning  


Many retirees have plans for their estate once they're gone.

Some aim to spend all their retirement funds, while others plan to leave assets to children, grandchildren, or charity.  

If you plan to leave a legacy, get advice before retirement to structure your assets effectively.  


Essential Estate Planning Considerations:  

- Who will manage your affairs? Nominate a legal personal representative to be your trustee or estate executor. Consider having an attorney familiar with your estate plan and will.  

- Who are your beneficiaries? Keep an up-to-date will to ensure clarity about your beneficiaries and wishes.  

- Tax Planning: Work with an accountant or financial advisor to protect your assets and minimize tax liabilities, such as death benefits tax. 



Alternatively, if you'd prefer a personal touch, book a free 15-minute consultation here to discuss your specific situation and explore how to optimise your retirement plan.


The information provided on this website/in this document (including any [financial products] mentioned) is general advice only and does not take into account your individual objectives, financial situation or needs.

Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product (if any) having regard to your objectives, financial situation and needs.



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