Australians are redefining retirement in the wake of COVID. The notion of working flat-out then stopping 'dead' in your tracks just does not 'work'.
Some people will use their own funds from 60-67 then use the pension after that.
There is no one way to retire - so here are some tips on getting to retirement with enough of your health and funds to enjoy it.
'Go early and go hard' to coin the often used COVID terms. Put as much into superannuation as possible as early as possible.
We used the Smart Gov Compound Interest calculator to create this scenario.
The subscription model is favoured by many companies. It allows you to charge a monthly fee for a service. For individuals this can be a trap. Some subscription models are difficult to stop.
Superannuation also has fees - it is recommended to keep these below 1%.
Check your credit card and internet bills for any recurring unused or unneeded subscriptions.
Avoid mounting credit card debts. Sometimes short term loans or credit can be a form of forced savings, however long-term credit card debt is never recommended.
If you gross $150k with 30% expences (COGS) - if you reduce your expences by 5% (COGS), how much does your Net Profit increase by in percentage year on year?
That is an increase of 6.67% to your Gross Profit Margin. Hence cutting expenses by 5% reaps a large dividend.
Your partner or spouse may have a different vision for the future than you. Discuss your plans and maybe do some trial runs beforehand.
If you plan to retire early you will need some solid funds and or assets behind you. You may be healthy now, don't assume that will last forever.
Superannuation remains one of the best structures for low-tax saving. In the accumulation phase the maximum tax is 15 per cent. A majority of people who retire after 60 pay no tax on their super pensions or withdrawals.
Australia has 2.2 million landlords. Property is a very popular investment in Australia. Relying totally on superannuation leaves you vulnerable to future legislation changes.
Consider developing a side-gig that can produce some income in retirement.
Australia's current labour shortage and high rents should make part-time work a real option. Politicians rarely talk about the quality of jobs they create. Be wary of toxic work environments.
It may be from a financial planner or your accountant. Financial advice and strategies vary.
Find the balance that suits you. Some people will never really retire. Some surfers on the Gold Coast take some early retirement when the surf is on. Think of those beautiful sunny winters days - why not take a few early retirement hours, get some practise for when you are in retirement. That way by the time you get to retirement it will feel normal.