Getting ready for retirement

As you approach your fifties and sixties, you will probably start to think about retiring. For many women, this can herald a significant change in lifestyle.

Some early planning for this new stage of life can help you enjoy a successful transition from work to your retirement.

When can you retire?

In Australia there is no fixed age at which women have to retire. Currently, you can access superannuation from age 55 to 60 depending on when you were born.You may be entitled to the age pension from age 65 to 67, depending on when you were born. Use the super and age pension calculator to find out.

Work out when you would be entitled to the Age Pension and superannuation.

Super and pension age calculator

Making a gradual transition to retirement

Many women choose a gradual transition to retirement, often winding back their working days over a few years. This lets you become accustomed to a reduced workload and gives you time to develop hobbies or interests for later in your retirement. By delaying full-time retirement you can also accumulate a larger nest egg.

There are many options available to help you make the transition to retirement. For example, a transition to retirement income stream, or pension, lets you draw down your super to supplement your employment income when you cut back your working week. 

Case study: Jill gets a taste for retirement

Jill, a 60-year-old divorcee, wanted to retire but was concerned about the loss of social contact and mental stimulation that work provided.

'This year I've moved from a full-time role to a part-time position. Initially I felt I had a lot of time on my hands, so I joined the volunteer group at my local hospital, and now I feel busier than ever!

'I'm still keen to stay on at work for a few more years but getting a taste of retirement has been really reassuring. I'm not so worried about being bored or lonely after I finish up with work. And by putting off my full retirement and not drawing on my retirement savings, my nest egg should last longer.'

Will you have enough money?

The amount of money you will need to retire depends on your age and your intended lifestyle. Most retirees need more income in their first years of retirement when they might take the opportunity to travel or pursue hobbies. As they get older, their lifestyle winds down and they will need less income.

Work out what income you are likely to have at retirement. Retirement planner

Give your super a last minute boost

If you earn substantial take-home pay but still worry that your super won't be enough to fund a comfortable retirement, it may be possible to give your nest egg a last minute boost.

Speak to your employer about salary sacrificing, or contributing to super from your pre-tax income. While it means taking home less pay now, it is a simple way to add to your super. It may also be tax effective. 

If you're on a lower income you may be eligible for a government co-contribution. Find out more from the Australian Tax Office: Super co-contributions.

Good advice can be a good investment

Our tax and super systems are complex. Getting good advice to help you navigate through your finances can make a big difference. 

Managing the lifestyle change

For many women, retirement involves a significant change in lifestyle. Not only do you have more leisure time, you are likely to see a lot more of your family and friends.

Talk to your partner about how you are both coping with retirement. Healthy communication will smooth the transition from worker to retiree, and let you make the most of this new stage of life.

Like any of life's milestones, retirement requires careful planning to make it fulfilling. Looking ahead at how much money you will need and what you like to do will help you ease into retirement and enjoy your accomplishments.

For more information about retirement planning contact us on 07 4726 4777.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at www.moneysmart.gov.au 

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