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Planning your retirement – why timing is important

When it comes to planning your retirement, there’s no rule that says you have to retire by a certain age. Depending on your situation, there are a range of factors that need to be taken into account – and timing it right is crucial.

Your financial adviser can help you make the most of your savings, superannuation and any long service or other employment entitlements, while carefully managing your tax obligations. Here, we look at the key considerations when charting a course to your golden years. 

If you’ve been thinking about retiring, recent events have no doubt cast a new light on the matter. Stepping away from work, or reducing your hours, and relying on alternative sources of income is a big decision, and one that understandably, many people feel unsure about. For most people, uncertainty eases with clarity. 

In our experience, sitting down with clients and helping them articulate and understand what retirement means to them, how they’d like to live and what they’d like to be able to do, all leads to how much money they will need for the retirement lifestyle of their choice.  

You may recall in an earlier article, Will you have enough to retire in comfort? the Association of Superannuation Funds Australia indicated a couple who owned their own home would require a super balance of $640,000, and be eligible for a partial pension. Taking the time to understand your financial position well before you retire will allow you to plan and make decisions that are right for you. 

For, example, you may no longer want to work full time, but you enjoy the social and mental stimulation of working. Or perhaps your financial position is such that you need to continue earning for a few more years, so you’re able to enjoy your lifestyle of choice.

Transitioning to retirement

If you’re not ready to down tools just yet, but you’d like to start enjoying a little more freedom, a customised Transition to Retirement (TTR) strategy could be suitable for you.

Many pre-retirees who have reached preservation age find it useful to begin drawing on their superannuation as part of a TTR strategy. This can help in one of two ways.

Firstly, you can access your super to make up for the income you will no longer earn when you reduce your hours or go part-time. Secondly, you could begin salary sacrificing an equal or greater to portion of your pay into your super. This can be a tax efficient strategy, particularly for those in higher tax brackets. 

Making the most of your entitlements

Timing your retirement, perhaps even delaying it for several weeks or months, to make the most annual leave and long service leave entitlements (and the super paid on those entitlements) can add considerable extra funds to your retirement savings.

There may also be benefits to delaying your retirement to a new financial year to take advantage of tax savings and super provisions relating to your age and work situation.

If you’re planning on accessing the Age Pension, having a full understanding of how and where your assets are held, and how they affect your eligibility may be helpful when applying for benefits. This may include a Seniors’ Health Care Card, which is a practical step that can reduce the burden of health and wellbeing expenses.

Next steps…

If you’d like to get a firmer idea of when the right time for you to retire might be, start by gathering key pieces of information, such as your super balance, current leave entitlements and your estimated retirement budget.

Then schedule a time to catch up with your financial adviser, who will help you navigate the options available so you may feel financially confident that you’ll retire at a time that’s right for you.

Once you have a plan, the rest is all about looking forward to enjoying your retirement and making memories with those you love.

For help navigating your financial future and planning your retirement, please contact Blue Harbour Financial Partners on 07 3821 1161 or email office@blueharbour.com.au

At Blue Harbour, we are known for helping everyday Australians to PLAN and GROW their personal prosperity, PROTECT what’s important, and RETIRE to the lifestyle of their choice.

Blue Harbour Financial Partners and its advisers are Authorised Representatives of Fortnum Advice Pty Ltd ABN 52 634 060 709 AFSL 519190. This article is general advice only and does not take into account your objectives, financial situation or needs. Please consider your own circumstances and whether the advice is right for you before making a decision. Always obtain a Product Disclosure Statement (PDS) before making any financial decisions in relation to acquiring a product..

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