Retirement is a significant milestone in life and planning for it requires careful consideration and preparation. There are many tools and strategies available to help you secure a comfortable retirement. This guide will walk you through the key steps to take when planning for your retirement.
Determine how much money you'll need for retirement
The first step in retirement planning is determining how much money you'll need to maintain your desired lifestyle. The amount varies depending on factors such as your living expenses, health care needs, and whether you plan to travel or pursue hobbies.
The Association of Superannuation Funds of Australia (ASFA) provides a Retirement Standard1 that estimates the annual income required for a modest or comfortable retirement. For example, as of June quarter 2025, a single person needs approximately $53,289 per year for a comfortable retirement, while a couple requires around $75,319. These figures assume you own your home outright and are relatively healthy.
To calculate your personal retirement needs, consider your current expenses and adjust for inflation and potential changes in lifestyle. Online retirement calculators, such as those provided by superannuation funds, can help you estimate how much you'll need to save.
Make a retirement plan
Once you know how much you'll need, the next step is to create a retirement plan. This involves setting financial goals and determining how to achieve them. Key components of a retirement plan include:
- Superannuation contributions - Take advantage of Australia's superannuation system by making regular contributions. The current Superannuation Guarantee (SG) rate is 12% of your salary, which your employer must contribute. You may also be able to make voluntary contributions to boost your savings.
- Investment strategy - Review your super fund's investment options and ensure how you are invested aligns with your risk tolerance and retirement timeline. Younger individuals may opt for higher-growth investments, while those nearing retirement might prefer more conservative options.
- Debt reduction - Aim to pay off significant debts, such as your mortgage, before retiring. This will reduce your financial burden and free up more of your retirement income for living expenses.
- Budgeting - Develop a budget that reflects your retirement goals. This will help you track your progress and adjust as needed.
What happens to your superannuation when you retire
Super plays a central role in funding retirement for most Australians. It's essential to understand how your super works when you stop working.
- Accessing your super - You can access your super once you reach your 60 years of age and leave work. Alternatively, you can access it at age 65, even if you're still working.
- Income streams - Many retirees choose to convert their super into an income stream, such as an account-based pension. This provides regular payments while keeping the remaining balance invested.
- Lump sum withdrawals - You can also withdraw your super as a lump sum. However, this option requires careful planning to ensure you don't outlive your savings.
- Tax implications: Super withdrawals are generally tax-free for individuals aged 60 and over. However, it's important to understand the tax rules if you access your super earlier or have untaxed elements in your fund.
Getting financial advice
Retirement planning can be complex, and professional financial advice can help you make informed decisions. A qualified financial adviser can assist with:
- Superannuation strategies - Recommending ways to maximise your super contributions and optimise your investment strategy.
- Centrelink benefits - Helping you understand your eligibility for the Age Pension and other government benefits.
- Tax planning - Providing guidance on minimising tax liabilities during retirement and in the lead-up to retirement.
When choosing a financial adviser, look for someone who is licensed by the Australian Securities and Investments Commission (ASIC) and has experience in retirement planning.
Lifestyle considerations
When planning for retirement, it's essential to consider several lifestyle components to ensure a fulfilling and financially secure future. Here are some key lifestyle considerations to keep in mind:
- health and wellbeing
- social connections
- purpose and fulfilment
- legal and estate planning
- lifestyle goals.
By carefully considering these components, you can create a retirement plan that supports not only your financial security but also your overall happiness and wellbeing.
The steps to planning for your retirement
Planning for retirement is a journey that requires careful thought and action. By working out how much you need, how you would like to spend your time, creating a solid plan, understanding your superannuation and seeking professional advice, you can set yourself up for a financially secure and fulfilling retirement. Start early, review your plan regularly and make adjustments as needed to stay on track.
Remember, retirement is not just about financial security — it's about enjoying the next chapter of your life with peace of mind.
How Gallagher can help
Wherever you are on your financial journey, from early career to retirement, we can help you plan for the future and adjust to changes when 'life' happens.
From busy individuals to those with complex business or personal situations, our advisers can help you achieve your financial goals by bridging the gap of where you are today and where you want to be tomorrow. Get in touch today.
Sources
1 Retirement Standard, Association of Superannuation Funds of Australia, accessed 27 Oct 2025
