Are you starting to think about your retirement? Even if you don’t plan to give up work completely, it’s worth thinking about things like super, annuities and age-related entitlements so you can make the most of your hard-earned money. Here are some steps to get you started.
Pay down any debt
Once you stop working full time, you will need to watch your dollars a little more carefully. If you cash in your super, clearing any debt should be top priority. Start with high-interest loans such as credit cards and personal loans and then pay off your mortgage, if possible.
It’s also a smart move to make an appointment with an adviser from your super provider to find out what options you have for your money and what the tax implications are. One option is to receive a regular income from your super, another is to withdraw it in one lump sum.
Check if you’re eligible for the Age Pension, government benefits or any other concessions. See how tax on retirement income works and where to get help if you need it. Always seek independent advice to ensure you are making the right choice for your circumstances.
Review your private health insurance
It’s worth reviewing your health cover periodically, and it’s definitely something you should do upon retirement. You need to know what is covered, and who is still on it – will you keep your children on your policy if they are still living at home? What medical specialists are covered and do you need to add more, such as optometry or podiatry?
It’s also a good idea to work out what your health insurance does cover, to ensure you are getting the most out of your policy. Some providers offer exercise classes for older people, for example.
Review your budget
Once you’re retired, review your budget and ensure you’re getting the best deals for day to day items. Thankfully you’ll now have more time, which means you can shop around so your money goes further.
Every year the Association of Superannuation Funds of Australia (ASFA) publishes an estimate of how much money a couple or single will need in retirement, depending on their lifestyle. While it’s possible to live off the Age Pension, most people have a lump sum to supplement this. If you feel up to it, it’s a great idea to continue working to supplement your income. Here are some ways to streamline your finances.
- Get creative with food shopping and shop for seasonal produce that will generally be not only cheaper but also better quality.
- Keep an eye out for weekly specials so you can stock up, and for items (using your supermarket rewards card) that give you bonus points to put towards flights, for example. Buy larger packets if it works out cheaper, where possible.
- Buy clothes at op shops or have a look on eBay for designer clothes at reduced prices.
- Review all your bills, including water, energy and gas, to see where you can make savings. Shop around for a new provider if you feel you aren’t getting the best deal – many offer discounts to retirees.
- Prioritise your health so you don't need to spend money on doctors. Eat well, get some exercise and spend some time relaxing in nature to boost your wellbeing. Read our recent blog on other ways to boost your longevity.
- Take advantage of government benefits such as solar panel discounts, and check if your state offers government help for other necessary home maintenance, such as plumbing.
- Use your Seniors Card to grab any discounts for the theatre, museums, food and drink, beauty products and more, and find out about discounts for tourist attractions such as national parks and public transport.
Is it time to downsize?
For many people, downsizing does not happen straight after retirement. However, if you are thinking of downsizing to an apartment, land lease community or retirement village, now is the time to start going through your belongings and selling or giving away what you no longer need.
Once you have your finances in order and a sound plan for your retirement, you’ll find your thoughts can turn towards enjoying this chapter of your life – which is of course what you’ve worked so hard for. Good luck.
Want to learn more about making the most of your next 30 years?
Retirement living can be the best time of your life.
We’re committed to making life better for the over 55s. Check out downsizing.com.au for more insights and great advice on living life to the fullest. We have a great range of properties for the over 55s to help you do that with like-minded people in land lease communities and retirement villages.