Get yourself retirement ready with these nine thought starters

Giving up work may be something you’ve dreamed about for decades, but don’t just dream about it, get ready for it! Here are some questions to ask early on, so you’re going in prepared.  

Alarm-clock free mornings, time to travel, opportunities to do new things - retirement sounds idyllic! 

To retire confidently though, mapping things out may go a long way. It’s also important to prepare for the unexpected. Numerous Australians report having to retire earlier than planned for reasons such as injury, retrenchment, sickness, and having no work available*.

Here are nine questions to get you started. 

1. What age do you want to retire? 

The average age people say they’d like to retire is 65.5*, according to data from the Australian Bureau of Statistics (ABS). There are many things to think about. Health and lifestyle can factor in and (of course) money.

As most Australians use their super savings to fund (or partially fund) their retirement, the age you can access your super may play a role in your decision. To access super, you generally need to have reached your preservation age (which is based on your data of birth) and be retired. 

If you want to keep working in some capacity and you’ve reached your preservation age, you may also be able to access some of your super through a transition to retirement pension. 

Between ages 60 and 64, if you change jobs or stop working for some other reason, you can also access your super. When you reach age 65, you don’t have to retire or satisfy any special requirements to take your retirement savings.  

If your eligibility for the government Age Pension is a factor, our Age Pension info page covers eligibility and rates. Note that eligibility age has been increasing and will be between 65 and 67 depending on your date of birth.

2. What’s your ideal retirement lifestyle?

It’s worth giving some thought to how you want to live in retirement and what you want to do with your time. 

You may have plans to downsize your home, move to a new city, or into a retirement village eventually. Other things to think about might include your social life, hobbies, sports, whether you want to go on holidays, buy a car or help out any loved ones financially. 

Your aged care preferences might also be worth a thought in case you need extra help in future. You may prefer making some decisions now, rather than someone guessing on your behalf later on.

3. How much money will you need? 

The Association of Superannuation Funds of Australia (ASFA) provides a quarterly benchmark indicating how much people aged 65 to 84 are likely to spend annually in retirement, depending on their lifestyle. 

This table shows the annual budgets needed to live a comfortable versus modest lifestyle, according to ASFA, compared to the maximum government Age Pension rates+.  Note, these figures will change in the future. 

ASFA’s annual budgets are also based on the idea that people own their home outright and are relatively healthy. So, if you don’t fit one or both of these categories, your modest or comfortable budget in retirement could look quite different. 

Our CFS retirement calculator can help you determine how much money you might need for the retirement lifestyle you want. 

4. How will you cover your costs? 

Now you’ve thought about the type of lifestyle you’d like in retirement, and what it is likely to cost, how might you pay for it?

On top of your super and the government Age Pension, if you’re eligible for it, consider other savings, investments and any inheritance you’re expecting.

There are other government benefits which you may be eligible for too. These might include carer allowance, rent assistance, the energy supplement, concession cards, and the Seniors and Pensioners Tax Offset. For more details, check our guide to concession entitlements for retirees and pensioners. 

If you’re not eligible for the government Age Pension now, remember if your situation changes, such as your income and assets, you may be in future.

5. Are you going to downsize your home?

From age 55, you may be able to make a super contribution of up to $300,000 using the proceeds from the sale of your home.

Both members of a couple can take advantage, which means up to $600,000 of the sale proceeds (maximum $300,000 per person) can be contributed into super. 

If you want to read up on the benefits, eligibility and other things to consider with downsizer contributions, read our article: How to upsize your super with a tax-free downsizer contribution. 

There could also be other before and after-tax contributions you may want to consider, some of which are tax deductible. 

6. How will you withdraw your super? 

The first thing to know is you don’t have to withdraw your super straight away. You can leave it where it is and even continue making contributions if you want. 

When you’re ready to start accessing your super, you may choose to:

Withdraw it as a lump sum 

This could be helpful if you want to use the money to pay off debt, buy a car, or do something else.

Regardless of how you want to access your super and what you do with it, you’ll want to make sure you’re across the different tax consequences of each option you have (and at what age!) as this could save you a lot of money in the long run. 

Convert it into a regular income 

If you’ve gotten used to receiving an income while you’ve been working, you might decide to roll your super money into an account-based pension.  

It’s a bit like a super account but for retirement. Your money stays invested and can generate returns. Unlike super though, you can withdraw a regular tax-effective income from it, as well as lump sums when you need to. Learn more about how account-based pensions work.  

Keep in mind, the income you receive is based on what you’ve saved in super, so it won’t necessarily guarantee an income forever.  

Tip: It may be possible to top up any income you receive from an account-based pension with part or full government Age Pension payments, if you meet eligibility.  

7. Do you have debts? 

You may still owe money on your mortgage, renovations, a car, or something you helped your kids out with. If any of these things apply to you, adding up what you owe and paying that down while you’re still earning an income may help later on. 

Looking at what you’re spending a little more closely (your banking app might be worth a scroll) may alert you to where you could be cutting back to pay things down. 

8. Do your insurance and investment preferences need looking at? 

You might have insurance through super (which generally only lasts until a certain age) or your own personal insurance policy. Either way it’s worth checking if it will cover you in the years ahead and for how long. Those stiff joints might thank you later. 

It’s also important to be aware that as you head into retirement, you won’t have the benefit of time to ride out market highs and lows like you did when you were younger. 

For example, you mightn’t want the same exposure to a potential market crash in your retirement years, as it’ll be harder to recover from potential losses.

Check out your investment options or speak to an adviser to see if you’re happy with the level of risk attached to your investments. If you haven’t made an active choice with your super fund, this may be worth looking into too, as your super can generally be invested in different ways. 

9. Have you considered a will and estate plan?

We covered this previously. It mightn’t be something you want to think about, but having a will and estate plan in place, could help to see that your wishes are fulfilled.  

As part of this, you may also want to consider if you’ve made the right beneficiary nominations for things like your super, insurance or any other accounts.

^{* ABS Retirement and retirement intentions Australia} 

^{^ ASFA Retirement Standard – June 2023} 

^{+ Services Australia - Maximum Age Pension rates – September 2023}