Thinking about retirement but not yet ready to take the leap?

More Australians are considering putting off their retirement and working for longer. The most common factors influencing Australians on when to retire are personal health or physical abilities (19% male/14% female), retrenched/dismissed or no work available (9% male/5% female) and reaching the eligible age for an old age or service pension (37% male/19% female)*.

Whatever the reason, many individuals choose to phase into their retirement rather than moving into full retirement. This option provides a number of benefits and you can make this transition the start of a rewarding and happy retirement.

*Source: Australian Business Statistics, Retirement and Retirement Intentions, Australia, July 2014 to June 2015.

Things to consider

Cost of living

You need to give consideration to how much income you need each year to live. Many clients believe they need less when they are retired, but many actually need more! Remember you are no longer working so you now have more time to spend money.

The Australian Superannuation Funds Association (ASFA) estimates that a couple living a ‘’modest lifestyle” (better than Age Pension but still only able to afford fairly basic activities) require $34,855 yearly, while living a “comfortable lifestyle” requires $59,971.

Planning for your future

You may choose to phase into retirement because of financial security, because you are not ready for the sudden lifestyle change or because of both reasons. It’s vital that you share this decision with your financial planner in order to ensure that appropriate strategies are in place to extract the best outcome of this change in your life. For example your financial planner can build a transition to retirement strategy into your retirement plan that may lead to a considerable amount of tax savings in the long term, thereby increasing your retirement savings. Of course, whether this could be suitable to you will depend on your unique situation and needs, so you will need to discuss this in greater detail with your financial planner.

Consider your options

Through discussions with your financial planner, consider your options around reducing your work hours. To gain extra freedoms in your lifestyle, you may wish to continue working at a reduced number of days or hours. Talk to your employer about your plans and find out about the options available to you. Even if your company does not offer this option, this would be a good opportunity to discuss a win win solution for both your employer and yourself.

If you are self employed, you may need to start thinking about your succession plan. Do you wish to hand over more responsibility to a family member or will you need to consider an external source to step in either as an investor or as an employee? It’s important to structure the best solution that will deliver the best result for your retirement plans. It’s important you seek professional assistance with these matters to ensure ultimate results with value, tax and legal matters.

Review your financial position

As part of your retirement planning, be sure to review your current and desired position with your finances. Understand what you can achieve and work with a financial professional to find strategies to boost your retirement savings if necessary.

Evaluate your lifestyle needs

Another part of your retirement planning process is evaluating your lifestyle now and for the future. It’s important to discuss how you would like to manage your lifestyle in retirement and ensure sufficient retirement savings are in place. You may need to compromise and come to a middle ground on your expectations for the future. Prepare yourself for these changes and talk about your future now.

Get ready for the change

You must be prepared for the change. You will have extra hours and days to spend on things other than work. Make plans and prepare yourself for this change. You may like to consider and think about hobbies and other activities you may like to begin. It’s important to stay active as this can help you with your physical and mental well-being. Connect with your community and friends who may be going through a similar experience. The whole purpose of retirement, whether you are phasing or jumping straight into it, is to start reaping the benefits of your years of hard work. Remember to enjoy life and have fun taking the first few steps towards your retirement.

Some helpful resources

The Australian Government website provides a range of information about phasing into retirement including a host of links to other sites with useful information.

Centrelink provides information for people who are retired or who are planning their retirement. There’s plenty of information around pensions, allowances, concession cards, loan schemes, claim forms, assessment for residential aged care and a range of specialist services. is the Australian Government’s premier source of information for Australians over 50. provides older Australians with information on health, lifestyle, care, finance, work and their legal rights and entitlements, information around community history.

About Seniors offer access to a range of information around health and well-being, travel, wealth and plenty more.

Call us on 9548 5933 for an appointment to discuss how we can help you to work towards achieving your financial and lifestyle goals during this important stage in your life.

This information and certain references, where indicated, are taken from sources believed to be accurate and correct. To the extent permitted by the Law, Customised Financial, its representatives, officers and employees accept no liability for any person that relies upon the information contained herein.