Learn about retirement
Planning for retirement
Most of us expect to retire one day, yet few of us really think how retirement will affect our financial security and lifestyle – which is surprising given we spend up to a third of our lives retired.
It pays to put plans in place so you can live the lifestyle you want. With careful planning your retirement should include some of the best years of your life.
Use our retirement gap calculator to see if your super and the age pension will be enough to give you the income you would like at retirement
Once you’ve estimated how much money you need in retirement you will need to start putting in place strategies to help you reach your target.
You’re about to retire
If retirement is just around the corner for you, you’ll probably want to consider more stable investment options.
Fixed interest investments may provide you with the security you desire or agreed investment returns.
It’s also worth evaluating the options open to you via your superannuation.
You may want to use your super to start an income stream, rather than take a cash lump sum.
This is because:
- no tax will be payable on earnings within the pension phase (compared to up to 15% in the accumulation phase),if you are over 60¹:
- your income stream payments will be tax free², and
- you don't have to include the income payments in your annual tax return, which could reduce the tax payable on your non-super investments.
These tax benefits may enable you to receive a more tax-effective income to meet your living expenses, particularly if your super benefit is quite large and/or you receive income from non-super investments.
PLUS don’t forget to explore any Centrelink payments you may be eligible for.
With recent changes to Centrelink’s assets test (for the age pension) you’ll now lose only $1.50 in pension entitlements (rather than $3) for every $1,000 you exceed the prescribed assets limit.
You hope to retire in five years
If you’re planning to retire from full-time work in around five years, it may be worth considering a mix of investments across local and international shares, property, fixed interest and cash.
You may also wish to contribute additional funds to your superannuation, or even take advantage of transition to retirement strategies. If you’re over 55 you can choose to take advantage of transition to retirement strategies. This may allow you to cut your working hours but maintain your income level by taking a regular income stream from your superannuation.
For more information regarding your contributions to super see the learn about Superannuation section.
Retirement is five years or more away
With your retirement still some time away, you have the luxury to consider investment in higher risk options, including the share market where length of time in the market is important.
You may wish to discuss your options with your financial planner. When you work with a financial planner they’ll measure and consider the level of risk you are comfortable with and recommend an appropriate investment strategy.
¹ If you’ve reached your preservation age and are less than 60 years old, the taxable part of your income stream will be taxed at your marginal tax rate. If your income stream is paid from a taxed source, you will also receive a tax offset equal to 15% of the taxable part of the income stream.
² Where income is paid from a taxed super source e.g. public offer superannuation fund.
Short-term 
