Good planning before you retire will make your retirement easier. Even if you have only a few months before you retire, you can still benefit from taking control of your money.
Work out how much money you'll need when you retire and find out what you may get from your superannuation. You also need to find out whether you will qualify for any government assistance after you retire.
Talk to retired friends or family members to learn from their experiences and do some homework on your finances so you're better prepared. You may also want to talk to a financial adviser.
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The bottom line
- Work out what you will have to live on when you retire. Will you be eligible for the Age Pension? What will you get from your superannuation?
- Take control of your money and plan now for your retirement needs.
- Get independent advice to help you decide how to arrange your finances.
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Work out how much you'll need
When you retire from full-time work, you'll need enough money to live at the standard you want for the rest of your life. Start by working out a rough yearly budget. See Budgeting.
Look at your current living expenses and work out how they would change if you retired.
Your housing costs will be very different if you expect to have paid off your mortgage by retirement. If you have children, will they need financial help from you after you retire?
As well as ongoing living expenses, it also pays to plan for occasional one-off expenses.
You may be thinking about spoiling yourself or your family after you retire. Some people may want to make the most of their new-found freedom by taking a holiday overseas or a trip around Australia. Others may want to treat themselves to a new car. If you have goals like these, include them in your plans as the first step towards achieving them.
You will also need to plan for more mundane but necessary expenses such as repairs to your home or replacing your appliances as they wear out.
Find out how your budget compares to research that's been done on how much retired people need to live on. See More information.
Government assistance
When you retire you may be eligible for the Age Pension and a number of other benefits including discounted public transport fares, concessions on your electricity and gas bills and free or discounted health care. See More information.
Get advice
Good financial advice can really help you get your plans in order. It can also help you decide when to retire.
The earlier you retire, the longer you will have to live on your savings. You might have to support yourself for 30 years or more. In addition to any age pension you may receive, take a look at what your superannuation will give you and check how your savings are going. If you don't have as much as you need, you may want to consider working a little longer or working part-time so you can build up some extra money.
There are risks in some investment products. Pay attention to the fine print, and make sure you get independent advice before you decide. See Getting information and advice.
Superannuation
Your superannuation is your investment in your future. It's important to understand what you will be entitled to after you retire. You may be able to choose how you want to get your benefit. Your funds may offer you a lump sum, a pension or a mixture of both. See Superannuation.
Retirement income
You can use your superannuation (or other money) to buy special retirement income products offered by superannuation funds and life insurance companies. These products receive tax concessions, and you may also have to pay less tax on income you receive. There are different types and they have different effects on your eligibility for government assistance. Check with Centrelink or a licensed financial adviser if you want to find out more. See More information.
More information
There's a lot more that you can find out about retirement and money. See More information.