Retirement planning

Retirement planning is the process of determining how you ultimately intend to fund your lifestyle needs and expectations once you reach retirement. It involves determining what your retirement income goals are and the actions and decisions necessary to obtain those goals. 

Retirement planning includes identifying the resources you intend to use to fund your income needs, estimating expenses and looking at your budget as a way of identifying ways to boost savings before you reach your retirement age target. The management and protection of your assets and risk taken along the way is also very important.

Ideally, retirement planning should be a life-long process with the earlier you start the better off you will be in retirement. This is the best way to ensure a safe, secure and enjoyable retirement. After all, you deserve it!

Like the pilot of a plane, our job is to guide you through the turbulence and there will definitely be turbulence along the way. But don’t worry, our goal is to get you to your ultimate destination with as little turbulence as possible.  The boring part is planning how you’ll get there.

Key Points

  • Retirement planning takes into account not only assets and income but also likely future expenses, liabilities, and your family history especially around life expectancy.
  • Retirement planning refers to financial strategies to help boost savings, investments, and ultimately the resources you intend to use such as tax effective income streams and/or Centrelink in order to meet your expenditure and lifestyle needs once retired.
  • Many popular investment vehicles such as superannuation allow retirement savers to grow their money with tax advantages along the way. The less tax you pay in tax the quicker your investments grow and the more you have available once you ultimately do retire.
  • It is never too early or too late (although earlier is always better!) to start your retirement planning.
  • A holistic approach to retirement planning is the best approach as it considers all areas in order to achieve your goals

Retirement Planning Goals

Remember, retirement planning starts long before you retire and the sooner, the better.

The main question I always get asked is how much do I need for retirement. My answer generally is, put away as much as you can afford to do towards your retirement while being cautious of access to funds should an emergency occur.

For example, if you use a vehicle such as superannuation, the funds may not be accessible for a long time which could mean you would need to wait until you reach the age of 65.

However, from a goal setting perspective if you need a “magic figure,” the amount you need to retire comfortably is highly personalised to each individual but there are numerous rules that can give you an idea of how much to save.

People used to say that you need around $1 million to retire comfortably. From a financial planning point you may wish to use the 80% rule (i.e., you need enough to live on 80% of your working income at retirement). If your income was $62,500 per year, you would need savings that could provide $50,000 per year for roughly 20 years, or $1 million. Others may say most people aren’t saving anywhere near enough to meet those objectives and therefore should adjust their lifestyle to live on what they have.

Whatever method you use our financial planner can assist to help you calculate your retirement savings needs so it’s best to start as early as you can.

Other Aspects of Retirement Planning

Retirement planning includes a lot more than simply how much you will save and how much you need. It takes into account your complete financial situation. Some people say I don’t need to worry about this because “I should receive a large inheritance that would cover my retirement goals”. My answer is, what happens if you don’t. Always plan for the worst and hope for the best!

Your Home

For most Australians, their home is the single biggest asset they own. So the question is, how does it fit into your retirement plans?

Once you reach retirement there is the question of whether you should sell your home. If you still live in the house where you raised your children, it might be larger than you need and the expenses that come with holding onto it might be considerable. Your retirement plan should include an unbiased look at your home and what to do with it especially if your retirement savings aren’t enough to meet your lifestyle needs.

Estate Planning

Your estate plan addresses what happens to your assets after you die. It should always include a Will that lays out your plans along with strategy’s to help reduce taxes wherever possible. This may include for example a testamentary trust if leaving money to your grandchildren which could provide significant tax savings for them until they reach their vesting age (when they get those funds). Other aspects may include power of attorney’s to cover you while you are alive should you not be able to manage your own affairs and need someone to step in and assist.

Tax Effective income

Once you reach retirement age and begin drawing down an income, taxes become a big problem. Most income streams are not taxed once you reach the age of 60 on both earnings and income drawn. So, the question is, how much of your assets should be in these retirement vehicles and what is the most effective way to allocate your assets as you head towards retirement. As with everything, there are rules and penalties for breaching laws especially around contribution amounts. So talking to your financial planner is important to make sure your plan is right for you and that you don’t get on the wrong side of the law.


Insurance is a key component to retirement planning as it protects your assets from unexpected events in the future. As we get older our medical expenses will increase and you will have to navigate the often complicated Medicare system. Many people feel that standard Medicare doesn’t provide adequate coverage, so they look to a private health fund policy to supplement it. There’s also life insurance, permanent disability insurance and income protection to consider before you reach retirement. You don’t want an unexpected event to impact your retirement goals leaving you unable to meet your lifestyle or even expenditure needs.

Another type of policy issued by an insurance company is an annuity. An annuity is much like a pension. You put money on deposit with an insurance company that later pays you a set monthly amount. There are many different options with annuities and many considerations when deciding if an annuity is right for you.


You have worked hard all your life, right! The very least the government can do is give you something back. So the question is, what am I entitled too?

We can help you get a sense of what your Centrelink benefits will be, and at what age you are eligible to start taking them. Eligibility for benefits usually begin at age 65 if born before 1 January 1954 and will increase to 67 on 1 July 2023 for those born after. We can help put in place strategies which may also increase your entitlements via such strategies as gifting and many more.

The Government

Staying on top of legislative changes becomes another issue that needs to be considered. Increasingly the government is seeing your retirement savings as another pot of gold they wish to get their hands on. Your financial planner will help to navigate this if and when it should occur.

Remember, for a safe and secure retirement starting early is important. Plan today and enjoy tomorrow!