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Make your money last in retirement

Thoughtful planning can make your savings go further

Page reading time: 5 minutes

Part of getting the most out of retirement is feeling confident that you’re getting the most out of your retirement savings. Everyone’s financial situation is different, but there are five simple steps that can help anyone – and everyone – feel more organised.

 

1. Do a retirement budget

When you retire, some of the things you spend your money on will change. Having a budget will give you a plan – and control - for your retirement spending.

If you’re not sure how to even start thinking about how much you might spend in retirement, you can:

Use the Moneysmart budget planner to work out where your money is likely to be spent in retirement.

2. Work out your sources of retirement income 

You might have more sources of income in retirement than you think.

For many Australians, superannuation and/or the Age Pension are their main sources of income in retirement. So, we’ve focused on those two sources below.

It’s important to know that you may have other options though. Learn more about sources of retirement income.  

3. Check if you can get government assistance

Around 62% of Australians aged 65 or older get income support payments from the government. Government entitlements can help boost your income and reduce your costs in retirement.

You might be eligible for government benefits such as:

You might also be able to receive one or more concession cards. They can give you discounts on things like public transport, prescriptions, health care, utility bills and insurance.

Not sure where to start with government assistance? Read the Services Australia Guide to Australian Government payments.

4. Decide what to do with your super

How and when you choose to access and use your super can make a big difference to how long it lasts.

There are lots of different things you can do with your super when you retire, including:

Leave it in super

You can leave your money in super as long as you like and just apply to take some out when you need it.

Start an account-based pension

This type of account pays you a regular income stream. You can also take out bigger amounts when you want to.

Withdraw your super and put it somewhere else

You can take your money out of the super system and invest it in some other way.

Start an annuity/lifetime income stream

This type of account pays you a regular income for the rest of your life.

Use a Transition to Retirement account

This type of account can be used between the ages of 60 and 65, if you want to start using your super but you're still working.

Do a combination

Choose any combination of the above options!

 

Learn more about what you can do with your super when you retire.

5. Use our retirement planner

Now that you’ve worked through your spending, your savings, your government assistance opportunities, and choices you can make with your super, it’s time to try the retirement planner.

The Moneysmart retirement planner can help you to:

You can add in career changes and breaks, big lifestyle goals that need extra money on top of your living expenses, plus changes in investment choices and regular income.   

Other things to think about

Depending on your personal situation, there are other things to think about when it comes to making your money last in retirement. The Moneysmart website has lots of useful information to help you navigate changes as you need to. Including:

Working in retirement

Earning an income from work can help your retirement savings last longer. It can reduce your need to draw down on your super and keep you engaged with the community. If you want to keep working, either full- or part-time, consider the following:

  • Transition to retirement – once you have reached age 60, you can access some of your super while working full or part time. This lets you supplement your income while continuing to contribute to super.
  • Retrain or change career – explore your options to retrain or seek part-time work at the Your Career website.
  • Work Bonus – if you receive the Age Pension, you can work and earn $300 per fortnight without reducing your pension.

Managing your health

Good health makes a big difference to your enjoyment and costs in retirement. While illness can affect anyone, research shows maintaining your physical, mental and social wellbeing helps you get more out of life – whatever health challenges you may face.

Find out more about managing your health costs.

Downsizing and accessing home equity

If you own a home, it is likely to be one of your largest assets. For some retirees, downsizing or moving to a more affordable area is a way to free up your money. Others choose to rent out a room for extra income.

These are big decisions, and it’s important to weigh up the pros and cons. Before going ahead, check the tax impact and whether it will affect your government benefits.

See downsizing in retirement and home equity release.

Helping others without risking your money

Helping family and friends can be rewarding but make sure your own lifestyle isn’t at risk.

Be clear if the help you are offering is a loan or a gift. If you lend to your family or friends, consider preparing a written agreement setting out the term and repayment amounts. See more on relationships and money.

Be very careful about guaranteeing a loan for a friend or family member, and ensure you understand the risks involved.

Protecting your assets

Maintaining an income in retirement means staying in control of your money. That includes protecting your money from people you know – as well as from people you don’t know, like scammers.

Find out more about protecting your money from financial abuse and scams.

Consider also if you have the right insurances, such as home insurance or car insurance, and understand their coverage and cost.

Getting help if you need it

If you find managing money in retirement confusing or are worried in any way, there are services available to help: