Thinking ahead to when you want to retire involves more than just looking at cruise brochures and considering downsizing. Being financially savvy is your secret to enjoying your time away from the office to the max.
Reaching your 50s is a great time to start seriously preparing for retirement. In Australia, with access to superannuation, pension, and other support systems, you’re well-placed to create a plan that supports your future lifestyle. Whether you’re just getting started or refining your approach, here are 11 smart steps to help you get retirement ready.
- Review Your Superannuation Strategy
Your super is likely to be your biggest retirement asset, so it’s essential to know where you stand. Check your current balance, fees, insurance premiums, and investment mix. Consider consolidating multiple accounts to save on fees and make sure your investment strategy matches your retirement timeline and risk profile. - Make Catch-Up Contributions
If you’ve had career breaks or lower-income years, you may be eligible to make catch-up concessional contributions. These allow you to contribute more to your super using unused contribution caps from the previous five years- provided your total super balance is under $500,000. - Maximise Tax-Effective Contributions
Salary sacrificing into super can reduce your taxable income while growing your retirement savings. You can also make after-tax (non-concessional) contributions to super to increase your nest egg faster. Just be mindful of the annual contribution caps to avoid extra taxes. - Consider Downsizer Contributions
Australians aged 55 and over can make a downsizer contribution of up to $300,000 into super from the sale of their home. This option is especially useful if you’re planning to move to a smaller property or relocate and want to use the proceeds to bolster your retirement savings. - Track Your Spending and Set a Retirement Budget
Now’s the time to understand your current expenses and how they might change, post-retirement. Tracking your spending will help you create a retirement budget that reflects your expected lifestyle and ensures you don’t run out of funds too early. - Clear Your Debts Before You Retire
Try to eliminate personal debts like your mortgage, car loans, and credit cards before retirement. Living debt-free reduces financial pressure and lets you make the most of your retirement income, giving you more flexibility and peace of mind. - Review Your Investment Mix
As retirement approaches, it’s wise to reassess your investment strategy. You may want to shift toward more stable, income-generating investments while still maintaining some growth to keep up with inflation. A financial adviser can help you balance risk and return effectively. - Understand Your Age Pension Eligibility
Get familiar with the eligibility requirements for the Age Pension, including age, residency, income, and assets tests. Even if you’re not eligible for the full pension, you might still receive a part pension or benefits like the Pensioner Concession Card, which can offer significant savings.
- Consider Part-Time or Transition-to-Retirement Work
Many Australians ease into retirement by cutting back to part-time work. You can also access a Transition to Retirement (TTR) income stream from your super, which can help supplement your income while preserving your nest egg and continuing to grow it. - Plan for Future Aged Care Needs
It may feel early, but planning for potential aged care needs now can save you and your family stress down the track. Familiarise yourself with home care packages, residential aged care options, and how the system works – including how it may be funded through your assets and super. Consider having early conversations with family and include aged care in your financial and estate planning. - Get Professional Financial Advice
A licensed financial adviser can help you develop a tailored retirement plan, optimise your super and investments, and take advantage of government benefits. For many over 50s, professional advice adds confidence, clarity, and long-term value to their retirement journey.
And finally . . .
Retirement planning in your 50s is about taking control and making the most of the time you still have in the workforce. With good planning, expert help, and smart use of our country’s retirement systems, you can set yourself up for a financially secure and enjoyable retirement.