Eight Cs to Supercharge Retirement

You probably know you should invest or do better things with your money to make sure you have enough for a comfortable, secure and fun retirement.

Deep down you want to make some decisions on putting a plan in place that gets your money working for you and your retirement because you know – soon enough – you will run out of time, which means your options may become limited and, so too, the success of any pending retirement plan.

The problem is there are an infinite number of experts giving their opinion on how you should use your money wisely towards your retirement. Many ‘experts’ are out there offering tips on investing in property or shares, budgeting, reducing debt.  Both physical bookshops and Audible are full of personal finance books spruiking the latest money philosophy.  Bombarded with bad advice, it can seem:

  • confusing;
  • irrelevant to your circumstances; and
  • leaves you feeling drained and overwhelmed and unsure where to start.

Wish someone could cut through all this and give you a brief list of things to do that are easy to action and you can make a start on today?  Help us at hand! Here are the seven tips that put you on the right path to plan for your retirement

Eight Cs for Retirement Success

  • Choose the age at which you want to retire
  • Create your vision for your dream life retirement
  • Calculate your living expenses now and how much money you will need every week to uphold the lifestyle you see for yourself in retirement
  • Chart what role investments will make in determining how much money you need to retire on
  • Cancel out your debts
  • Calibrate your superannuation to your advantage.
  • Craft a plan to get you out of debt
  • Check how much money you will actually need
  • Course correct – make changes now to avoid a shortfall

1. Choose the age at which you want to retire

It’s extremely common for people to believe they have to retire at a certain age, which is usually the age at which you can qualify for government benefits, which were once known as ‘the pension’. That age has stretched out over time – it once was 65 for men and 60 for women, but as our health improves and our lifespans extend, these concepts no longer apply.  The days of working in a 9 to 5 job until your mid-sixties, taking your gold watch and expecting to live only a few more years are long gone.  Most Australians will need to fund their retirement, not for a few years, but for a few decades, and the fear is that we will run out of money.

While accessing your superannuation investments to fund your retirement does have some age-based conditions and penalties, the reality is, you can retire right now if you want to, so long as you have the money behind you to afford it.

The only age rule that applies then is, yours. At what age do you want the ability to choose whether you work or not?

Setting your ideal retirement age is important because it defines your target and focuses in
on how much time you have left to save or generate enough money to fund your retirement.

2. Create a vision of what retirement looks like for you

When you retire, you’ll most likely have so much more time on your hands for hobbies, travel, sightseeing, shopping and other activities. Start creating a vision for what you want life to look like in retirement. Try to imagine life just as you live now but with all the free time having no work to fill up your week, where would you go, what would you do and what things would you want to experience?  Creating this vision will help determine how much money you will need each week to fund this quality of life once you retire.  Try not to be limited by the activities you think you can afford. What have you always wanted to do? And who do you want to do those things with, and where – start there.

3. Calculate your living expenses now and how much money you will need every week to uphold the lifestyle you see for yourself in retirement.

How much money will you need every week to maintain your quality of life plus cater for additional hobbies, travel and personal health or wellbeing costs that may arise?

It’s so common for people to assume they will live off half their current income once they retire. This simply isn’t true. An average guide is that you will need about 70%-85% of what you earn now or according to Association of Superannuation Funds of Australia, a comfortable living in retirement for a couple is about $62,000 each year. BUT it’s not fair to assume you are simply an average or you need to stick to an assumed guide so here’s three ways to determine how much you will need;

  • Do a budget for what your cost of living is now – including the fun stuff, like eating out, having friends over or weekend getaways. Hint: the more realistic this is, the better. Look at what you actually spend in any month – do a date range search on your bank statement. You’d be surprised where it all goes.


  • Costs for any planned experiences in retirement – travel, hobbies or one-off purchases you plan to take up in retirement. You can literally search travel sites now to add up the costs of your dream holiday around the world or the beachside unit you envision retiring in, the one with an extra bedroom for when the grandchildren come to stay, or with an office for when you write that book you’ve been meaning to finish.

  • Costs from your budget that should no longer apply when you retire – like children’s school fees, mortgage repayments and car loan repayments. It’s worth investigating insurance housing options that reduce when you get older.

4. Chart what role investments will make in determining how much money you need to retire.

Total up the value of all the assets you know you can use when you retire. These include your superannuation, investment properties, businesses you own or part-own that you can sell, as well as stocks, shares, term deposits held in your name or that of a trust. It’s worth checking if you or your partner are members of any family trusts.  The real value of these needs to be free of debt, so subtract what you owe from what you own, creating a ‘net worth’ figure.

To make this calculation, try using ‘the rule of seven/ten’. If an investment earns 7% each year, it will double in value every 10 years. The problem is, investments rarely grow at a constant 7% each year, every year and forever, but it is a guide to what net worth may be when you expect to retire.

5. Cancel out your debts.

Debts like mortgages and credit cards can really put the handbrakes on your ability to invest enough for your retirement. Here are some easy tips om how to pay down a loan of $500,000 faster and how much you could save:

  • Making repayments weekly instead of monthly – could save you $58,004
  • Making an additional $100 per week in repayments – could save you $132,408
  • Combining the above and depositing $1,500 per fortnight in an offset account – could save you $158,403
  • Combining all the above and reducing your interest rate by 0.5% – could save you $205,484 – that’s almost HALF of the value of that original debt of $500,000. 

6. Calibrate your superannuation to your advantage.

For many Australians, superannuation is free money, a cost to your employer. For those who are self-employed, it’s an asset protection tool and can allow contributions to be used as a tax deduction for the business. Super is also more tax-effective than most investments (including the business) and current rules allow superannuation to be tax-free when you reach age 60.

Superannuation is a must in anyone’s retirement plan so here’s how to optimise your super:

  • If it is viable for you to do so, make additional contributions by salary sacrificing or if you are a business owner, make contributions above the required 9.5%
  • Check your super fees, below 0.8% per year is reasonable. Also check with your employer if the super fund they use offers any subsidised fees. A 0.5% lower fee can literally be worth thousands of dollars to you.
  • Consider what insurance is held in your super because these can be cost effective and provide support should you pass away or become disabled and not able to work. But also check that you are not doubling up on this insurance as that is a waste of money.
  • Check how your super is invested to make sure it’s right for you. You should consider:
    • How long you’re investing for (investment time horizon) – if you’re young, you have time to ride out market lows and benefit from the long term returns, so you may be able to take on more share type investments within your super. If you’re closer to retirement and being able to access your super, you may prefer a conservative approach as a share market crash could be harder to recover from than if you’re 20 years away from retirement.
    • How much investment risk you’re comfortable with – generally there’s three options you can adopt when investing and each will vary in how much your super may fluctuate in value year to year or align with your investment time horizon;
      • Growth option: consisting mainly of shares which is suitable for those say, 10 years or more away from retirement
      • Balanced option: having a mix of growth investments (Iike shares) and conservative investments (like term deposits)
      • Conservative option: suitable to those just a few years out or even in retirement.

7. Check how much money will you actually need.

Today’s retirees can expect to live to an average age of 84.9 years for men and 87.6 for women, or roughly 25 and 27 years respectively if you retire at 60. That’s a long time to be self-funded! You then you need to consider how much income you’ll draw down every year from your investments, the rate of return your investments earn, the effects a drop in your investment value will have, economic downturns and cost of living increases.

With so many factors involved, you want to be as certain as possible that your retirement plan will be successful.

The following table outlines how much money you will need to support an income of $70,000 p.a. (in today’s dollar equivalent). We have outlined the lump sum required based on a 50%, 80% and 95% probability of your retirement plan succeeding. It’s probably safe to assume you would prefer your retirement plan to have a 95% probability of success;

Retirement Age50% probability80% probability95% probability

Source: Accurium

Assumption; Broadly 50/50 mix of growth assets and defensive assets assumed to be invested through super.

8. Course correct – make changes now to avoid a shortfall

If you’re facing a shortfall in retirement, there are several things you can do to get your retirement on track. You could consider boosting your super through additional contributions, delaying your retirement, adjusting your retirement lifestyle expectations, making additional investments or selling other assets.

By simply having an idea of your current and projected retirement savings, you could work to improve the situation. The earlier you start, the easier it may be for you to reach your retirement goals.


Disclaimer: The information in this article is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any of the information you should consider the appropriateness of the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant Product Disclosure Statement or other offer document prior to acting on any financial product or implementing any financial strategy.

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