Naturally, you’re looking forward to the day you can work less and enjoy the next phase of your life. But thinking about your tomorrow takes a little planning today.
The road to retirement
Retirement isn't just about money. It’s a chance to redefine almost every aspect of your life – your time, your activities, your lifestyle and your personal identity.
Our five-step road to retirement and retirement timeline can help you get that planning underway.
- Set a date. Select a target date for your retirement (if you are still working).
- Income. Decide how you want to convert your retirement savings into income. Not sure how? Get some advice.
- Budget. Create a retirement budget. Look at how much you need to live to fund your lifestyle. Include funds for emergencies such as household repairs or medical bills.
- Assets. Consolidate your assets. Get your superannuation accounts together (if you haven’t already) and minimise fees. Also consider any other investments and assets you have.
- Advice. Now’s the time to get expert advice on your retirement strategy. Make sure you’re on the right track to achieving your goals by speaking to a licensed financial adviser.
The retirement timeline
Whether you’re planning for retirement or already retired, there’s a few important super and tax milestones that could affect you.
Here’s how you can take advantage of them.
55: Transition to retirement
Once you turn 55, you can access your super even if you’re still working using a Transition to Retirement (TTR) strategy.
You may also qualify for a tax offset, which reduces your tax bill directly.60: Tax-free super.
When you reach 60, you can withdraw your super tax-free and the income you receive from a pension plan will be tax-free too.
65: Withdraw your super
Age 65 is considered the current standard retirement and pension age. But if you do choose to keep working, remember you’ll still enjoy many benefits other than just a steady income.
For instance, you could qualify for the senior Australian tax offset and your private health insurance tax offset may increase to 35%.
It’s also your last chance to add to your super without needing to satisfy the work test. If you make spouse contributions and your spouse is over 65, they will need to meet the work test for the year of your contribution.
70: No more super from others
At 70, you may no longer be eligible to receive super contributions from your employer or your spouse. But you can still receive government co-contributions for one more year.
You may still be entitled to employer contributions depending on your employment agreement or industrial award.
Also, your private health insurance tax offset increases to 40%
75: No more super from you
While you’re no longer allowed to make personal contributions to your super, you may still be entitled to employer contributions depending on your employment agreement or industrial award.