The Financial Planning Association of Australia The Financial Planning Association of Australia

Retirement is looming –will I still get to play golf?


This week is Financial Planning Week! If you have any burning questions about setting yourself up for a comfortable retirement, head to the Ask an Expert forum and ask a qualified expert for free.

Life has a funny habit of passing us by. In the blink of an eye, we’re in our fifties and retirement doesn’t seem that far off anymore. Do you know how much you’ll need to retire comfortably? To play golf, visit the family and do all the things you love?

If the very thought of it gives you knots in your stomach, it might be time to take a closer look. Your financial planner can sit down with you and work out what your likely cost of living will be during retirement.  From this, you can work back to what super you’ll need to target.

Often these discussions are triggered by the receipt of a work bonus, inheritance or an unexpected windfall from a large tax return. For many empty nesters, calculating how much is needed to retire is where the reality sets in. Most are shocked by the outcome of this and more often than not, it sparks some form of action. This action might be:

A review of Super

To ensure your super is working as hard as possible, it’s a good idea to review your current super fund performance and assess whether it’s performing as well as it can be. Your financial planner can advise you on whether there is a better fund, and explore other opportunities such as setting up a Self-Managed Super Fund (SMSF). SMSFs are becoming increasingly popular here in Australia, but your suitability will depend on how financially savvy you are. Either way, your financial planner can help you make some smart decisions at the outset.

Paying down debt

You may wish to consider paying down your mortgage (or any other large debt) whilst you / your partner are still earning a full salary. This will take off the pressure of debt servicing, when you’re down to a partial or zero income.

Salary sacrificing

For high income earners in the higher marginal tax bracket, salary sacrificing might be a great way to supercharge savings and put aside more for tomorrow. This will depend on how financially comfortable you are today, and how much room you have for manoeuvre. Any money you ‘sacrifice’, will only get taxed at the 15% super contribution rate, rather than your personal marginal tax rate – so that ultimately means more for you, and less for the ATO. Just make sure you’re aware of the contribution caps.

There are of course, plenty of other strategies too. The right strategy for you will very much depend on your existing circumstances – and of course how extravagant your lifestyle is. It’s vital you seek professional help from a financial planner who is experienced and qualified to advise you.

Not sure where to look? All members of the Financial Planning Association (FPA) are bound by strict education and ethical standards. The FPA Find a Planner directory will help you locate an expert near you.

Round of golf anyone?