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Guidance

Setting up your retirement

Setting up your retirement

It's never too early, or too late, to start thinking about the life you want in retirement.

Retiring might be many years away for you, but taking the time to prepare now will help you move into a stress-free retirement when you are ready.

Step 1: Look into your current arrangement

When you’ve worked multiple jobs it can be easy to end up with multiple super accounts. If this is the case, the first thing you should consider is consolidating your accounts into one. If you have multiple accounts you’re probably paying multiple fees and may not be getting the full benefit from your money.

Step 2: Estimate how much you need

The Association of Superannuation Funds of Australia (ASFA) provides a guide for how much the average person and the average couple may need per year of retirement. It is updated four times a year to ensure it stays in line with current costs.

To personalise it to your own circumstances you can estimate your costs per month for the following categories ASFA outlines:

  • Housing
  • Energy
  • Food
  • Clothing
  • Household goods and services
  • Health
  • Transport
  • Leisure
  • Communications

Multiply the total monthly amount by the number of months you anticipate you’ll be retired.

Step 3: Check if there is a shortfall

Now you have a rough idea of how much you want to have saved by the time you retire, see whether you’re likely to reach this by contributing to your super at your current rate by using our Retirement Calculator. It’s important to keep in mind that your income and guaranteed super contributions may increase over this time period.

Step 4: Speed up the process

Whether there’s a shortfall or you want to make sure you have more super when you retire, there are ways you can boost your super.

These include consolidating all your super into one account and using salary sacrifice to ensure that you’re making the most of the tax concessions available – typically extra contributions from your pre-tax income are taxed at a rate of 15% instead of your marginal tax rate (plus Medicare levy and other applicable levies).

Next up: Questions to ask before making a big purchase

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information.