Make the most of an unexpected retirement
Many Australians don’t get to retire on their own terms. Here’s how to navigate an early or unexpected retirement.
By Joel Atputharaj – 4:30-min read
A little about Joel
Joel Atputharaj is the Director, Retirement Solutions at Russell Investments. A Fellow of the Institute of Actuaries, he helps members and clients navigate complex challenges and has worn many hats across the superannuation and consulting businesses. Joel currently leads a program of work aimed at making continuous improvements to Russell Investments’ offer for members approaching, at, or in retirement.
Even with the best laid plans, life doesn’t always go the way we expect—and this can certainly be true when it comes to retirement.
Only about half of Australians who retired in the past 20 years left the workforce because they had reached retirement age, their spouse retired, or they wanted to travel or pursue other leisure activities, according to the latest figures from the Australian Bureau of Statistics. The other half of recent retirees either lost or left their job for reasons outside their control, such as ill health or retrenchment.
It’s a situation that Anne found herself facing when her employer of 38 years made her position redundant in 2024.
Lessons from Anne’s early retirement
Anne had a long and interesting career, working in logistics and distribution roles in Townsville and North Queensland. “I’ve loved every minute of it,” she says. “Overall, the teams I've worked with have been magnificent and the last team was the one of the best.”
Anne had always intended to retire at 67, so she was surprised to have her role made redundant six months ahead of her planned retirement date.
Losing a job close to retirement can feel overwhelming, but Anne recalls being happy when the news arrived.
Her positive outlook was underpinned by careful planning. Throughout her working life, she consistently salary sacrificed into her superannuation, ensuring she was well-prepared for retirement. She also set up a transition to retirement pension when she turned 60, which allowed her to supplement her income and build her super account balance as she approached retirement.
When redundancy came, Anne also had long service leave and a payout to fall back on.
Anne has made the most of her early retirement. She quickly embraced a new and busy routine, swimming most afternoons, and joining the University of the Third Age (U3A), where she participates in courses ranging from science to history and digital photography.
“Work to me was very important. I was dedicated and I didn’t have many outside activities, but when I retired, I knew I had to keep my mind active. I’ve been retired for 12 months and I’m out more than I’ve ever been,” she says.
Anne’s advice for others is practical: start salary sacrificing in your 50s if possible; aim to be mortgage-free before retiring; and plan major expenses like renovations ahead of time. She also encourages retirees to stay active and engaged, highlighting the value of groups like U3A for lifelong learning and social connection.
Anne was fortunate that her redundancy came only six months before her planned retirement date and that she was well prepared. Others facing an early retirement may not be as prepared. But with the right steps, you can gain control, achieve financial security, and nurture your wellbeing.
How to move forward with confidence and optimism
1. Pause and take stock
How you feel about retiring earlier than planned may depend on why you’re leaving the workforce. Retirement is a big change and it’s normal to have mixed emotions. Take time to process the change and talk with loved ones or a counsellor if you need support.
2. Assess your financial position
Start by listing your assets and income sources—such as savings, superannuation, Age Pension entitlements, and any termination payments you may have received. Next, create a realistic budget, prioritising essentials like housing, healthcare, and daily living expenses. Avoid making major decisions like selling your home or withdrawing all your super until you’ve had time to plan.
Contact us or consider consulting a financial adviser to help you understand your options.
3. Explore income streams
Check your eligibility for government benefits , such as the government Age Pension or disability support. If you have superannuation, consider converting it to an income stream, which can provide regular payments and flexibility for lump-sum withdrawals when needed. Think about whether part-time or flexible work might be an option for you, or if you could turn your hobbies into an income source.
4. Protect your health
Consider whether retirement has changed your health and life insurance needs. You may need extra health insurance coverage for services like physiotherapy or dental care, but income protection insurance may no longer be relevant. Stay active and exercise and seek medical or mental health care if you need it.
5. Build a new routine and stay connected
A fulfilling retirement is about more than money. Create a daily routine that includes activities you enjoy – joining a club, volunteering, or learning something new. Staying socially connected is vital for mental wellbeing, so reach out to friends, family and community groups or support services for retirees.
6. Seek support
Many organisations and professionals are ready to help, from your super fund to community health services. Don’t hesitate to ask for guidance and support when you need it—taking action is a sign of strength.
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