Early Retirement Planning Tips

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Early Retirement Planning Tips

The average retirement age people intend to retire in Australia is 65.5 years* according to the ABS – but anecdotally many dream of retiring earlier.

But how do you do it?

The key to planning for retirement is ensuring that when you feel emotionally ready to retire, your finances are ready too.

By following some simple early retirement planning tips – and learning how to plan your retirement income – you can work towards making your early retirement dream a reality.

How to plan for retirement early

So how do you plan your retirement income? These early retirement planning tips may help you get started:

  • Think about what early retirement looks like to you
  • Work out the cost of living required to accommodate your ideal retirement
  • Determine your retirement savings goal
  • Develop an investment portfolio
  • Pay off your mortgage
  • Grow your super.

What does early retirement mean to you?

What does ‘your’ retirement look like? Do you want to holiday overseas, or relax closer to home? Big family home or down-size to a smaller home or unit? Dine our regularly, or BBQs at home? Dream car, or economical four cylinder?

Our retirement needs and wants, much like the rest of our financial needs and wants, are completely individual.

The secret is to figure out what you would like your retirement to look like, and then plan your retirement income around achieving those goals.

What will your cost of living be once you retire?

Your cost of living will change when you retire. Generally, you will need less income than when you were younger and possibly juggling a family, larger mortgage, family car, holidays and education expenses.

The million dollar question is this: how much retirement income is enough?

To work this out, think about how your retirement age and how you want to live in retirement. This will help you determine your estimated cost of living and the cashflow you will need to sustain the retirement lifestyle you want.

What is your retirement savings goal?

Okay, so you know when you want to retire, and how you want to live in retirement. Now you need to determine your retirement savings goal to accommodate your retirement.

Your savings will most likely be a combination of your superannuation, the value of your home (if you plan to downsize), your investment portfolio (shares, stocks, property) and any cash savings.

If you own your own home, a rule of thumb is that you’ll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement. (Source: MoneySmart.gov.au)

The Association of Superannuation Funds of Australia (ASFA) provides an industry retirement standard. This estimates how much money you’ll need, depending on your lifestyle. Or you can speak to a trusted financial adviser.

How can you grow your super effectively?

Boosting your super can make a big difference to your retirement and may set you up for life – particularly if you start earlier rather than later.

You may grow your super balance by:

  • Consolidating your super into one account, so you pay fewer fees
  • Making extra voluntary contributions to grow your super fund – including salary sacrificing into your super
  • Finding out if you’re eligible for bonus super contributions from the government
  • Changing your super investment options.

How to plan your retirement income

Most people can now expect to live into their 80s, so you’ll need to plan a retirement income that keeps pace – particularly if you retire early.

The key to planning a retirement income is to take a strategic, step-by-step approach and consider the following:

  • Your retirement income will need to cover your basic weekly, monthly and yearly expenses, along with ‘big ticket’ items such as a new car.
  • Think about your super and whether you would be best to receive super funds via an account-based pension, an annuity, a lump sum – or a combination of these. (Remember, your decision may have tax implications and could affect your Age Pension entitlements).

Early Retirement Planning Tips – MBA Financial Strategists

MBA Financial Strategists have been helping people create achievable, long-term financial plans – including planning for early retirement – since 1985.

Talk to them today about getting your retirement plans on track.

To book an appointment with a financial adviser, use our simple online booking link it allows you to make a time with a financial adviser of your choice on a day and at a time that suits you best.  Alternatively, simply give the practice a call on tel: |PHONE| to make a suitable appointment time.



*ABS – https://www.abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release


The Association of Superannuation Funds of Australia (ASFA)

Australian Taxation Office


MBA Financial Strategists Pty Ltd ABN 13 008 285 756 is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee. This article contains information that is general in nature.  It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.