Some moments in life reshape not just your finances, but the way you live. Starting a family, moving overseas for a job and changing careers are all examples. Retirement belongs in that same category.
Traditionally, retirement has been seen as a single milestone, celebrated on the day you stop working. In reality, it’s one of the longest and most significant chapters of your life, and it’s being reshaped by longer lifespans, evolving retirement rules and rising living costs.
With Australians now living longer than ever, retirement can span decades. Along the way come new priorities, changing spending habits and different financial decisions.1
That means retirement isn’t simply something to prepare for. It’s something you’ll need to navigate.
Know what you’re aiming for
Before thinking about how you’ll fund retirement, it’s worth asking a simpler question: what kind of retirement do you actually want?
The Association of Superannuation Funds of Australia (ASFA) Retirement Standard is a useful benchmark. It estimates the annual income needed to support different retirement lifestyles.
There’s no right or wrong answer. Some Australians dream of travelling the world. Others are happiest spending more time with family, pursuing hobbies or enjoying a slower pace of life closer to home.
What matters is having a destination in mind. It’s hard to know whether you’re saving enough, or investing appropriately, if you don’t know what you’re trying to fund.
With that in mind, here are the three broad phases of retirement and the financial considerations that tend to matter most in each.
Phase 1: Building your retirement runway
The five to ten years before retirement are a critical time for financial planning. Many of the biggest decisions get made now: when to retire, what lifestyle you want, whether you’re saving enough and how to make the most of your remaining working years.
Having a clear plan can make a meaningful difference. A recent report found that Australians who understand the steps they need to take are significantly more confident about funding their desired lifestyle, and more optimistic about their future, than those without a plan.
It’s also a good time to take stock of your financial position. Seven-figure super balances often grab the headlines, but they’re far from the norm. Australians aged 60 to 64 have a median super balance of around $236,126 for men and $174,655 for women.2
With many Australians approaching retirement with relatively modest balances, making the most of the opportunities to contribute to super can be particularly valuable.
Key questions to ask in the decade leading up to retirement:
Would downsizing or relocating improve my retirement lifestyle or financial position?
How much do I currently have in super and other investments, and will it support the lifestyle I want in retirement?
Are there any big-ticket experiences I want to budget for, such as a luxury cruise, overseas travel or helping my children financially?
Will I be in a position to pay off my mortgage before retirement?
Do I want to stop working completely, or gradually transition through part-time or consulting work?
Phase 2: Putting your nest egg to work
Once retirement begins, your financial mindset is likely to shift. Instead of building wealth, the priority becomes generating an income to support your lifestyle, while making your savings last for what could be another 20 or 30 years.
For many people, this is an uncomfortable transition. After decades of growing your retirement savings, you’re now relying on them to fund your lifestyle.
Retirees also need to consider sequencing risk. This is the impact a market downturn can have if it occurs early in retirement, while you’re also drawing an income from your portfolio. As a result, some retirees maintain exposure to growth assets alongside defensive investments and cash, depending on their circumstances, objectives and tolerance for risk.
Liquidity can help fund day-to-day spending and reduce the need to sell investments during volatile markets. Growth still matters, though, because inflation continues long after your working life ends.
Your retirement income may also come from multiple sources, including investments held outside super and, depending on your circumstances, the Age Pension.
Key questions to consider as you approach and enter retirement:
- Where will my retirement income come from: super, investments, rental income, the Age Pension or a combination of these?
- Is my investment portfolio still appropriate now that my focus has shifted from building wealth to drawing an income?
- Can my income keep pace with inflation?
- Do I have enough cash or liquidity to cover unexpected expenses or periods of market volatility?
- Am I reviewing my spending regularly to ensure my savings remain sustainable over the long term?
Phase 3: Planning your legacy
As retirement progresses, financial planning often becomes about much more than investment returns. Many retirees start thinking more carefully about how they’ll be cared for if their health changes, whether their home still suits their needs and how they want their assets distributed to loved ones.
These conversations aren’t always easy. But planning ahead can provide greater flexibility, reduce stress for your family and make sure your wishes are understood well before important decisions need to be made.
Conversations worth having at some stage during retirement:
- Is my will up to date, and have I reviewed my beneficiary nominations?
- Have I considered how I would fund aged care or additional healthcare needs if they arise?
- Does my current home still suit my needs, or would another living arrangement be more appropriate?
- Have I appointed the right people to make financial or medical decisions if I’m unable to do so?
- Does my estate plan reflect the legacy I want to leave for my family and loved ones?
Strategies to consider
Your retirement plan doesn’t need to be perfect. What matters is starting early, reviewing it regularly and adapting it as your circumstances change.
Here are some general strategies people often consider. As always, it’s important to consider whether any strategy is appropriate for your personal circumstances, and to seek professional advice if needed.
- Start small. Retirement planning doesn’t have to happen all at once. Begin by discussing a few key questions with your partner (or contact us), such as when you’d like to retire and how much super you may need.
- Review your super regularly. Make a habit of logging into your super account to check your balance, investment options, fund performance and insurance cover.
- Consider super contributions. If you’re still working, additional concessional (before-tax) contributions may help grow your retirement savings.
- Understand carry-forward contribution caps. If your total super balance is below $500,000 and you meet the eligibility requirements, you may be able to use unused concessional contribution caps from the previous five financial years.
- Learn about downsizer contributions. If you’re 55 or over and meet the eligibility requirements, selling your home may allow you to contribute up to $300,000 each ($600,000 per couple) into super.
Contact us if you have any questions.
1 ASFA Retirement Standard: Budgets for various households and living standards for those aged 65–84 (March quarter 2026) 2 Median super balance, by age and sex, 2023–24 financial year, Australian Taxation Office
Source: Vanguard
Important Information:
CSF Private Wealth Pty Ltd (ABN 36 634 263 148) is a Corporate Authorised Representative No.1299668 of InterPrac Financial Planning Pty Ltd (Australian Financial Services Licence Number 246638).
The information in this article is general in nature and does not take into account your objectives, financial situation or needs. Before acting on this information, consider whether it is appropriate to you, and seek personalised advice where required.
Important Information:
CSF Private Wealth Pty Ltd (ABN 36 634 263 148) is a Corporate Authorised Representative No.1299668 of InterPrac Financial Planning Pty Ltd (Australian Financial Services Licence Number 246638).
The information in this article is general in nature and does not take into account your objectives, financial situation or needs. Before acting on this information, consider whether it is appropriate to you, and seek personalised advice where required.
