Pre-retirement to do list for today

Let the start of a new financial year signal new super resolutions for a well-earned retirement.

By Joel Atputharaj - 3 min read

A little about Joel

Joel Atputharaj is a senior manager at Russell Investments. A Fellow of the Institute of Actuaries, he helps clients navigate complexity and has worn many hats across the superannuation and consulting businesses, including actuarial consulting, account management, insurance and fund administration.

The start of a new financial year is a good time to take stock of your own personal financial situation, especially if you’re planning to retire in the next few years. While you may think you still have plenty of time up your sleeve, there are actions you can take now to ensure this important transition is as smooth as possible. This will help you to make the most of your move from paid work to the next stage of life. Here’s a checklist to get you started.

1. Establish good habits

Consistency is key. Just as regular exercise keeps us strong and healthy, regular contributions to super can beef up your retirement savings.

Making incremental before-tax contributions to your fund using salary sacrifice arrangements can help you to take advantage of the generally lower tax rates that apply to superannuation. Or maybe you'd prefer to make after-tax contributions? It’s money you add to your super account from your after-tax income and includes your take-home pay, savings or an inheritance. Either way, small changes can add up to great outcomes over time—whether you’re talking about physical or financial wellbeing.

2. Boost your super

If you receive a windfall—a larger-than-expected tax return or inheritance, perhaps—or sell your home and free up cash, superannuation can be a great place to save and build on that extra money.

Investment earnings on money held in your super fund are taxed at only 15 per cent, rather than the marginal tax rate that applies to savings and investments held outside your fund.

After-tax contributions are not taxed on entry into super, and after you turn 65 (or reach your preservation age and retire) you can take money out of your account tax-free.

3. Plan your time

As our columnist, retirement coach Jon Glass notes, you may have more than 10,000 days in retirement to fill. With less time at work and more time for yourself, how will you balance your activities? Perhaps begin by defining your own four ‘M’s of retirement:

• What will you miss from your work life?
• How will you measure your time – and how will you feel if your calendar is no longer crammed with work events?
• How will you create meaning for yourself after work?
• How will you master retirement by fleshing out what you will actually do day-to-day?

4. Set or re-set your goals

Do you dream of taking a trip of a lifetime after work or buying a boat? Or you may want to do something more practical like paying off your mortgage or putting a grandchild through university. If you have a ‘bucket list’, now is the time to plan how you’ll tick off those items.

Even if you don’t have any major expenses in mind, you will probably have an idea of what you want your retirement to look like. There is value in reviewing your goals or setting new ones to suit your changing circumstances. You might find it useful to set a retirement income goal via the GoalTracker® program to see how you’re tracking towards funding the lifestyle you want.

5. Protect yourself

Holding life insurance can bring peace of mind that you and your loved ones are protected against unexpected events. Retirement is a significant change in your circumstances and can affect your insurance coverage, so it is wise to review your arrangements as you approach this new stage. Read more on how retirement affects insurance in our Q&A with insurance expert, Mark Kelly.

6. Provide for your loved ones

As you set up for a stress-free retirement, make life easy for your loved ones by taking time to plan for a future beyond you. This might involve preparing a will, discussing with family your plans for any donations to charity or wishes you may have, and making a binding death benefit nomination for super.

With proper preparation, your retirement years will be enjoyable, fulfilling and worry free. Taking small steps now can go a long way towards making your move into retirement something to look forward to.

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