Turn a balance into a retirement plan
Retirement planning begins with spending, not a magic super number. Estimate essential costs such as housing, food, utilities, health and transport, then add flexible goals such as travel and helping family. Separate one-off expenses from the income needed every year.
Map the income that may fund those costs: super pensions or lump sums, Age Pension, work, savings, investments and home equity. The plan needs to cover timing as well as totals, because one source may begin years before another.
Choose how super will be used
After meeting a condition of release, you may leave money in accumulation, start an account-based pension, take a lump sum or use a combination. Each choice affects investment, minimum withdrawals, tax, fees, flexibility and estate outcomes. Moving money to retirement phase is not the same as moving it to cash.
Consider how much short-term spending should avoid market risk and how the rest remains invested for a retirement that could last decades. A cash reserve can reduce the need to sell growth assets after a fall, but holding too much cash can weaken long-term purchasing power.
Test the plan against real risks
Retirement can be affected by inflation, market falls, living longer than expected, health and aged-care costs, housing repairs and the death of a partner. Model lower returns and higher spending rather than relying on a single smooth projection. Decide which expenses could be reduced if conditions are worse than expected.
Review beneficiaries, insurance, wills and powers of attorney before retiring. Check Age Pension rules even if you expect to self-fund, because eligibility can change as assets and income change. Revisit the plan yearly and after major health, market or household events.
Quick reference
Key things to remember
- Start with spending, not a universal balance target.
- Model essential and discretionary costs separately.
- Allow for inflation, market falls, longevity and large one-off expenses.
- Review how account-based pensions, annuities and the Age Pension can interact.
Put it into practice
Your next steps
- 01
Estimate annual spending in today’s dollars.
- 02
List every income source and when it can begin.
- 03
Run a retirement projection with conservative assumptions.
- 04
Plan the first two years in more detail.
Go deeper
Guides in this topic
Check the source
Official information
Super and tax rules change. These primary sources are the right place to verify the details before you act.