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At some stage in our lives, we all start to dream of the hassle-free, relaxed, comfortable time of our lives called retirement. Retirement means different things to different people – for some it could be hitching up the caravan and traveling around Australia, it could be sleeping in every day knowing you no longer have to commute to work, or it could mean giving your garden a make-over to ensure you have a place to sit and read a book every afternoon.

Retirement may be still some time away for some, but for others reaching the dream of retirement may be very close.

As we get older and closer to this chapter of life, our attention needs to turn from dreaming about the possibilities to more seriously planning for retirement, such as reviewing:

  • How much do I have now?
  • How much will I need to live on in retirement?
  • When can I afford to retire?
  • Will my money last for another 30 years or more, if needed?
  • How much of the Aged Pension can I expect to receive?
  • Where can I get help?

The LLL has dedicated this page to help you answer these questions and others you may not have even thought of yet. We have provided plenty of links to resources to point you in the right direction.

Throughout this page, you will notice regular references to the Moneysmart website. This Australian Securities and Investments Commission (ASIC) website provides a great deal of unbiased information for assistance in many areas of personal finance, budgeting and wealth creation and we recommend you spend time looking it over.

Planning for RetirementLLL how to plan for retirement financial tips

Seek Financial Advice

‘Retirees who have used a financial planner allocated nearly twice as much of their savings to retirement income products than retirees who have not used a planner. The unadvised, in the meantime, have spent four times more of their retirement nest egg on lifestyle expenditure such as renovations, holidays and new vehicles (car, camper or boats) than planned retirees.’1

There are many organisations that can provide you with financial advice when planning for retirement, but which one is right for you? Moneysmart has a page on financial advice that can assist you when selecting a suitable professional.

A Financial Planner will be able to help you assess how much you have now and help you work through your future financial goals for retirement and set a plan to achieve them.

Many people aim to be self-funding when they retire, ensuring they have enough of a nest egg to enable them to live comfortably for the years to come. Planning ahead of retirement may mean the difference between a modest or a comfortable lifestyle, without having to fall back on the Aged Pension.

1 Investment Trends October 2016: Industry-wide collaboration necessary to better prepare Australians for aged care costs

Retirement Lifestyle – Modest or Comfortable

When people are planning for their retirement, they often ask financial planners: “How much do I need?”, only to be told “How much do you want?” that’s a fair enough response, but not overly helpful. Some people might want to travel overseas every year or two, some might want to travel in a caravan, and others might want to ensure they can join their golf and bowls clubs each year and still go out to dinner and the movies each week. Forward planning is essential to ensure you will have enough to maintain the lifestyle you would like.

Broadly speaking, advisers in the superannuation industry and financial planners generally use the terms “modest lifestyle” and “comfortable lifestyle”.

The Association of Superannuation Funds of Australia (AFSA) suggests that a “modest retirement lifestyle is considered better than the Age Pension, but still only able to afford fairly basic activities”. A “comfortable retirement lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel”.2

The AFSA website defines each of these retirement lifestyles in the AFSA Retirement Standard.


Included in the Retirement Standard is a detailed budget breakdown for singles and couples in a modest and comfortable lifestyle. This is well worth downloading and comparing to your current expenses.

It can be of great assistance when developing a budget for your retirement years.

The ASFA Retirement Standard webpage provides an overview and lists assumptions it has used when compiling the Standard and Budget. It is regularly updated to ensure all budget items remain current.

So with this information, when the planner asks you “how much do you want?” you may be able to provide a more informed reply.


Investing for retirement

When a person approaches retirement, a typical investment portfolio will generally consist of superannuation. However, some people may also have been financially comfortable enough to acquire a mix of shares, property and/or a high-interest cash account.

A key consideration when investing, whether it be shares, property or even Superannuation, is the degree of risk people are willing to accept. In general, the higher the potential return on a particular investment also means it could have a higher risk of no returns or a loss.

This chart shows the risk and returns relationship for different asset classes.


Investing for your retirement-LLL

The Moneysmart webpage Develop an investing plan explains the risk involved in different types of investment options.


This investment tool for retirement savings has been in use for many years. Originally a voluntary system of contributions was changed to a new superannuation system for all employees in Australia in 1983. The Keating Government introduced the compulsory employer contribution scheme in 1992, which is known today as the Superannuation Guarantee. The compulsory Superannuation Guarantee currently requires an employer to pay 9.5 percent of an employee’s wage or salary into a nominated super fund in the employee’s name.

The employee is able to add to his or her super fund through a concessional contribution called Salary Sacrifice. This is when the employee gives up some of their salary, which is then placed into the employee’s nominated super fund. The amount foregone does not attract Income Tax but is taxed by the fund at 15 percent. This is currently capped at $25,000 per year and is calculated by adding the employer contribution and the salary sacrifice amounts together.

The Moneysmart website can provide you with general information on superannuation and salary sacrifice options, and your financial adviser can assist with more specific information.

Self-Managed Super Funds (SMFS)

An SMSF is a private super fund that you manage, they are different to industry and retail super funds.  An SMSF provides you with the mechanism to manage your own super by making investment and insurance decisions. 

SMSFs are not for everyone, they can require a lot of commitment and understanding regarding what is involved.

For more information visit the Moneysmart website on SMSFs.

Visit the LLL SMSF Cash Account webpage for more information on saving with an LLL Self Managed Super Fund Cash Account.

Accessing your Super

You can access your Super when you retire or reach your ‘preservation age’, which is between 55 and 60, depending on when you were born.

There is a lot of information regarding accessing your super on the ATO website.

You should seek advice from your financial planner prior to withdrawing any funds from your super.

Debt retirement or management

A key consideration in your plan is the ability to become debt-free upon retirement.

‘The Journey Begin's3 states that, ‘Nearly half (46%) of the older workers surveyed expect to retire with debt. Worryingly, their largest source of debt is credit cards (25%), followed by a mortgage (21%) and unpaid bills (12%).’ (May 2017, page 12)

The earlier mentioned ASFA Retirement Standard assumes the household is debt-free when detailing retirement budgets.

As you move closer to retiring controlling debt may determine your lifestyle (modest or comfortable) once retired.  Discuss your debt management strategy with your financial planner with the ultimate goal of being debt-free once you retire.

3 The Journey Begins is a white paper produced by REST.

Living in RetirementLLL simple steps to save for your future retirement


Once retired it is recommended that you remain in contact with your financial adviser to assess your financial position. Keeping in touch with your financial adviser will ensure you regularly monitor and discuss your super balance, other savings, investments (shares, property and cash), any residual debt, and other personal assets and debt.

This should then give you an idea of your financial position and provide you with investment strategies to maximise your nest egg’s value and longevity.

The adviser should also recommend an affordable drawdown rate which is in line with your lifestyle expectations, including access to cash to pay bills and life’s unexpected expense surprises, whether it’s the need to buy a new car, fix your roof or replace your washing machine.

An LLL Savings Account is an ideal cash holding account for this purpose.

Commonly, funds are placed in mixed growth and defensive investments in conjunction with advice provided by a qualified financial advisor.

Account-based Pensions

Some retirees may wish to have a regular income. An account-based pension can provide a tax-effective regular income stream bought with money from your super. Typically you can choose; how much you wish to transfer (there are limits or caps); the size and frequency of payments; and the investment options in the fund.

The Moneysmart website provides more information about this type of income stream.


Another way of creating a regular income is with an Annuity. They can be for a fixed number of years, life expectancy or for life. As a lifetime or fixed-term pension, Annuities are less flexible than account-based pensions.

For more information about Annuities, the Moneysmart website is helpful.

Aged Pensions

Depending on your age and the amount of your investments, you may be eligible for a Federal Government-funded Aged Pension. Your financial adviser and Centrelink will be able to provide you with detailed information about your circumstances and eligibility.

For general information on the Aged Pension and other government benefits, please refer to the Moneysmart website. For entitlements and eligibility, please refer to the Centrelink website.


Make a Will

A Will is a written statement explaining how you would like your property and money distributed after you die. Paul Clitheroe (Moneymag, Feb 2019) said research shows “10 million Australians don’t have a Will”. Ironically, the article was titled Just over half of Australian adults do not have Will.

The Moneysmart website describes making a Will as planning ahead to make sure your wishes are carried out. This page also contains some information on powers of attorney which may be useful. Wills can be written at any time throughout your life.

Once you have made provision for your loved ones, a Will also allows you to take the opportunity to leave a legacy to a particular charitable organisation.

Leaving a legacy to the LLL will help you continue your lifetime of giving.

LLL legacy brochure coverBy naming the Lutheran Laypeople’s League in your Will, you can be sure that your gift will continue to provide support for mission and ministry beyond your lifetime.

In contrast to other charitable donations you might make, the amount you give as a legacy to the LLL is never spent. The income generated from the legacy enables the LLL to provide a grant based on your gift each year to support LCA projects in perpetuity4. Your legacy will continue to support church projects year after year.

For more information on how to leave a legacy to the LLL, visit the Legacies webpage. It contains information on how to leave a lasting gift to the LLL, details of wording for your Will and the permanent fund options for particular areas of support.

Leave more than memories behind with a lasting legacy to the LLL.

4 LLL Board policy is to retain all legacies and donations as reserves which are not to be spent.


When planning for your retirement the LLL recommends you obtain advice from a qualified financial adviser. The LLL does not have any affiliation or association with any financial advisor.