Pre-retirement planning checklist and superannuation

Wealth Management Insights

Many people only start planning for retirement when they enter their 50s and other family commitments have begun to decrease.

SuperannuationOur experienced financial planners frequently assist clients in their ‘pre-retirement’ phase, and it often requires much more than answering simple questions such as:

"How much super do I need to retire? or How long will my super last?

To help you plan effectively for retirement, here are 8 important issues you should address in advance…

1. Have a lifestyle plan

In planning for retirement, start by thinking about:

  • When and how you want to retire
  • What you want to do in retirement
  • What lifestyle you want to enjoy
  • How much money you may need each year

It is never too late or too early to plan. Even if you start 20 years ahead, you can set personal and financial goals and develop strategic plans for what you want from retirement.

Generally, most people start to plan their retirement around 10 years before they want to retire. At this stage, you will want to focus on where your investments are positioned, whether you have enough money to retire, and what changes you may need to make to close the gap.

Because superannuation generally forms a significant part of retirement wealth (due to the power of compound returns and tax concessions), consideration may be given toward making extra super contributions to reach your desired amount.

2. Prepare a budget

Preparing a budget is essential as it helps you see how much capital you need to meet your ideal lifestyle – as well as any adjustments you need to make.

Budget planning often leads to:

  • retirementchanging spending habits
  • paying down debts faster
  • adding to superannuation
  • deciding if you need to work for longer to save more

Some see a budget as a constraint, but having a budget allows you to prioritise your spending on what you want, instead of letting your spending control you.

When you prepare your budget, don’t just look at potential income and regular living costs. Consider how to meet unplanned expenses and allow for large capital expenditure items too – such as a new car, holiday, or home repair or renovation.

3. Reduce debts

More people are entering retirement with some debt; so where possible start reducing debts at least 10 years out from your planned retirement.

superannuationConsider whether you can:

  • consolidate debts
  • make extra payments
  • get lower interest rates

As your debts reduce, ask your financial planner to review your insurances to try to reduce premiums where possible so you can save more.  

4. Increase super contributions

As other family commitments and debts reduce, if eligible, you can start to contribute more to your superannuation, so you have more income in retirement. Create a strategy with your financial adviser for making tax-effective contributions.

There are also strategies you can use to make your money last longer via tax-free pension payments. Discuss these strategies with your financial planner so you can take full advantage of your super contribution and pension opportunities.

5. Monitor your investments regularly

You should monitor your investments and check in with your financial planner at least once a year. This is even more important as you near retirement.

SuperannuationWhile many people have a ‘set and forget’ approach to superannuation and other investments, it’s crucial to manage the level of risk (or loss of capital) you are willing to accept as you get older.

Discuss this with your financial planner so they can help you allocate assets and diversify your investments to suit your unique situation – rather than relying on past performance.

6. Check access to government benefits

Retirement planning is not complete without checking your eligibility for Australian Government benefits. These currently include the Age Pension, DVA Pension and Commonwealth Seniors Health Card.

Although you may not actively plan to receive an age pension benefit, the income and assets tests are reasonably high so it’s worth finding out if you are (or will be) eligible.

Work with your financial planner to see how your super and pension income streams interact with the age pension system. Also consider gifting some assets or renovating your home before you are eligible to receive the age pension. You may be able to increase your pension benefit.

7. Consider estate planning

SuperannuationIf you haven’t already, seek legal advice and prepare a Will that meets your estate planning goals. Your Solicitor can also help you prepare an Enduring Power of Attorney so a trusted person can step into your legal shoes if you become ill or lose capacity.

Every investment decision is also an estate planning decision. Although you may have outlined what you want in your Will, remember that you need to nominate beneficiaries, or your legal personal representative, for your super and pension accounts to align with your wishes.

When you do this, you should consider the tax implications for your nominated beneficiaries after you pass away.

8. Start now

Getting set for retirement doesn’t need to be complex. Sensible planning is the key, and it’s never too early to start planning for your retirement lifestyle.

Ideally, you should seriously consider your pre-retirement checklist now and at least 10 years before you plan to stop work. There is no compulsory retirement age in Australia but there are age limits to both contributing to and accessing your super. 




For advice from an experienced financial planner on how to properly prepare for your ideal retirement, contact your local RSM office.


This article has been prepared by RSM Financial Services Australia Pty Ltd ABN 22 009 176 354, AFS Licence No. 238282.

As everyone's circumstances are different and this article doesn't take into account your personal situation, it is important that you consider the above in light of your financial situation, needs and objectives, and seek financial advice before implementing a strategy.

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