Retirement is a major life transition – and it’s completely normal to feel some uncertainty about what’s next.
Your routine may have been shaped by your work schedule. Your identity might have been tied to your job. So, what happens now that this chapter is closing?
The good news is there’s plenty to look forward to. But it helps to ask yourself a few key questions to plan your next move with confidence.
- What will I do with my time?
One of the biggest changes in retirement is having more free time. That freedom can be exciting – but also overwhelming if you haven’t planned.
Think about what you’d like your days to look like.
- Are there hobbies you’ve always wanted to try?
- Would you enjoy volunteering a few days a week?
- Could you join a gym, or enrol in a course at your local TAFE or university?
“Keeping busy and doing things in retirement is good for your wellbeing and state of mind,” says Ben Nash, financial adviser and author of Virgin Millionaire.
While you might enjoy slowing down in the early stages of retirement, it’s worth thinking about how to stay active and connected over time – and what that might cost.
- Is retirement living a good rightsizing option?
If your family home starts to feel like it is too much to manage, moving into a smaller, more suitable home can be both practical and financially smart.
Downsizing can help unlock capital that you can put toward:
- A retirement village or land lease community
- Income-producing investments like dividend-paying shares
- Boosting your superannuation
If you’re over 55 and sell your home, you may be eligible to contribute up to $300,000 (or $600,000 as a couple) from the sale proceeds to your super – known as a downsizer contribution.
Just be aware: changes to your financial position may affect your eligibility for the Age Pension.
- How can I stay active and engaged?
Retirement is a fantastic opportunity to focus on your physical and mental health.
Stay active through regular exercise, take up new hobbies, or connect with social groups in your community. These activities not only keep you healthy – they can also give your days structure and purpose.
If you love travel, “lock and leave” homes in retirement communities or land lease resorts make it easier to explore without worrying about maintenance. Whether it’s ticking off dream destinations overseas or seeing more of Australia, now’s the time.
- How much money will I need?
Ben Nash recommends the “five per cent rule” as a simple guide: aim to draw about 5% annually from your pool of assets, without dipping into the capital.
For example, with $400,000 in investments (excluding your home), you could expect an income of about $20,000 per year for 20 years.
Start by working out your essential living costs (like rent, utilities, and transport), then estimate how much you’ll need to live the lifestyle you want. A tool like the Moneysmart retirement calculator can help you map out your income and expenses.
As a general benchmark, the Association of Superannuation Funds of Australia (ASFA) suggests:
- A single person needs between $33,000 and $52,000 per year, depending on lifestyle
- Aim for around two-thirds of your current income in retirement
The takeaway
Retirement doesn’t have to be daunting – it can be one of the most fulfilling stages of your life. With the right planning, you can create a future that’s financially secure, purpose-filled, and uniquely yours.