Retirement planning checklist

1. Evaluate your current situation

You can use a retirement calculator, such as MoneySmart to roughly estimate how much money you could have when you retire. Consider all your retirement income streams, including your super, employment, and other investments.
Also, consider whether you have any outstanding debts or multiple super accounts. Having multiple super accounts can result in higher fees and negatively impact your retirement savings. Before you consider consolidating your super, check for any existing insurance policies within your super.

2. Decide what kind of retirement you want

Do you want a modest retirement, a comfortable retirement, or do you want to enjoy even more freedom? You can use the ASFA guidelines to get an idea of what lifestyle different superannuation balances can equate to in retirement.

3. Make a plan

If you’re not on track to meet your goals, there are several things you can do to boost your retirement wealth. For example, topping up your super savings. This can be an effective way to get you closer to your goals. Making voluntary contributions to your super or setting up salary sacrifice are two ways to build up your super savings.
Working part-time is another option. But if you’re eligible for the Age Pension, you’ll need to consider how much you’d like to earn working part-time. If you own property or have other investments like shares, you need to consider whether to keep or sell them.
You’ll also need to think about the tax impact of these decisions and how it might affect your eligibility for other benefits.

4. Nominate beneficiaries

To ensure your money goes to your loved ones in the event of your death, you can nominate someone to receive your super. However, there are various conditions that apply, and talking to a financial adviser can help in making an informed decision.

5. Set up income streams

Even if you’ve accumulated a large amount of super over the years, you need to think about the most cost-effective and tax effective way to access it. Setting up an income stream, for example through an account-based pension, can be more tax-effective than simply withdrawing lump sums and can provide a reliable, ongoing payment. However, there is a lifetime cap on how much can be transferred to a tax free income stream and penalties can apply if the cap is exceeded.
You’ll also want to understand what government benefits you might be eligible to receive – for example the Age Pension, or other concessions.

6.Review your insurance cover

When you originally opened your super account, insurance might’ve been added automatically. It could also have been arranged outside of your super. It’s important to review your level of insurance as your circumstances change. For example, you might get married or divorced. Keeping your insurance up to date could make a significant difference to you and your loved ones.

7. Action your plan

Do you need to consolidate your super accounts? Set up an income stream for your super savings? Pay off existing debts? Update your insurance cover? Once your goal is clear and your plan is in place, you need to take action. As always, talking to a financial adviser can help with this.