What to consider when preparing for retirement

The earlier you start planning for retirement, the better. With life expectancy constantly on the rise, it pays to be on the front foot with retirement costs and lifestyle changes during this period. This guide is your starting point for things to consider when preparing for retirement.

Finances and superannuation

The cost of retirement

Planning your financial future needn’t be full of scary numbers. Some investment advisors like Scott Pape have been telling Australians there’s often less to save for your retirement than you think.

The Association of Superannuation Funds of Australia lists what costs and budgets for households and living standards are, and this is updated quarterly, every year. For those aged around 65 in the September quarter for 2020, nationally, the cost for one year of living was:

For a modest lifestyle

  • Single: $27,987
  • Couple: $40,440

For a comfortable lifestyle

  • Single: $43,901
  • Couple: $62,083

Your super options

When you’re eligible to draw on your super once when you reach preservation age or retire from the workforce, you can turn to three main options (or a combination of options) for financial support. Seek professional guidance when choosing the best one for you.

Leave your super where it is

This option can give you more time to come up with a super plan that suits your desired retirement lifestyle. While your super sits tight, you may be able to continue contributing to it depending on your age and employment. Keep in mind, however, you’ll have to pay tax on investment earnings, so it’s a good idea to weigh up the costs of this with other options.

Invest in a retirement income stream

This popular option creates a regular retirement income by transferring your funds to a “retirement phase” account within your super fund. You can take advantage of paying less tax, potentially making your money stretch further in smaller, salary-like instalments, and be able to make a lump-sum withdrawal when needed. There are minimum amounts that must be withdrawn every year based on your age, and a limit on how much can be transferred to a tax-free retirement phase.

Withdraw as cash

Withdrawing all your super as cash could be useful if you’re wanting to reduce your debts or withdraw partial lump-sums at regular times. Keep in mind this option could pose a potential risk for splurge spending as well have tax implications if you invest your money outside of super.

happy senior man sitting in the park on a bench.

Health and wellness

You’ve done all the hard work and now it’s your time to relax and enjoy retirement. Don’t let physical and mental ailments hold you back from making this a rewarding time in your life.

Keeping your mental health in check

According to research on seniors and relationships, four in five respondents confessed to feeling lonely at some time in their senior years. This social isolation can be the result of seniors being single, widowed or divorced; or no longer in the workforce.

Remaining active and socialising regularly is one way to helping achieve a healthy and happy mental space. Close to 84% of respondents in the same research said they participate in some form of social activity at least once a month, and catch up with friends frequently to ensure their retirement years are happy.

Work as a volunteer

Any type of loss, such as those involved with relationships, independence, work, and income, is a risk factor for older people developing anxiety or depression. One way to help combat this is to consider volunteering to build relationships, social interactions, and purpose. One in two seniors volunteer in their local community, with more than one in five (22.6%) respondents choosing to help charities or community groups, and one in seven (14.1%) volunteering to help local clubs or sporting organisations.

Never retire!

Another idea to consider is never retiring. We’re not suggesting you slug it out in your labour-intensive job forever; instead, consider working one day a week as a transition into retirement.

Choosing to work one day a week or once a fortnight may supplement your Age Pension. Singles can earn $300 per fortnight before their Age Pension reduces. Look up the details for the work bonus balance.

Estate planning

If you’re considering retirement, it’s also a good time to start planning how your assets will be distributed should you pass away. Protect your family by creating a legal will, and ensuring you have a ‘binding nomination’ with your super to ensure your benefit goes to who you want it to go to.

Assess your personal insurance status. Depending on the type of funeral you want, costs can vary greatly. If your family won’t have enough money set aside to pay for your funeral, then it may be time to consider funeral insurance to help protect them from this expense should you pass away. Choosi can help compare a range of trusted Australian brands should you decide to look at your insurance options.

When it comes to your retirement, it helps to get off on the right foot with a smart plan. By considering your financial plans, estate planning, and your health and wellness into retirement years ahead of time, you’ll gain valuable peace of mind that will result in golden years packed with enjoyment and discovery as opposed to stress and worry.


This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.

Information on this website doesn’t take into account your personal objectives, financial situation or needs. Advice is general in nature. You should consider the relevant Product Disclosure Statement (PDS) or Policy Booklet for more information and to ensure the product suits your needs. Choosi offers insurance products from a range of Australian brands. Choosi doesn’t provide information or offer cover for all products available in the market and there may be aspects of some products that Choosi doesn’t compare.