Retiring early

Whether you choose to or need to retire early, having a plan can give you comfort in the knowledge that your money will last the distance.

Whether lifestyle preferences or circumstances beyond your control are behind your decision to retire early, here are some things to consider.

How much money will you need in retirement?

Assuming you own your home outright and are relatively healthy, the Association of Superannuation Funds of Australia (ASFA) estimates that single Australians will need $42,764 a year, while couples will need a combined $60,264 a year for a comfortable retirement. A comfortable retirement is defined as being involved in a broad range of leisure and recreational activities and having a good standard of living1.

But the question of how much money you’ll need in retirement really is an individual one and it largely depends on your current lifestyle and how you want to live when you’re retired.

When can you withdraw your super?

You can access your super once you reach your preservation age, which ranges from age 55 to 60, depending on when you were born.

But sometimes life forces events upon us, such as sickness, injury or redundancy which lead to an early retirement. If this applies to you, there are some circumstances when you can withdraw your super early.

Tips for an early retirement

If you dream of an early retirement, the following financial tips might help your dream become a reality.

Have a financial plan

It’s a good idea to have a financial roadmap which spells out things like your financial goals, expenses and debts so you always know where you are.

Live more modestly

Get serious about spending less and saving more by embracing the FIRE (Financial Independence, Retire Early) philosophy of living frugally, saving hard and investing wisely.

Pay off your home loan

A mortgage is probably something you don’t want to take with you into retirement, so prioritise paying it off to give yourself greater financial freedom.

Boost your super

While you may not be able to access it straight away, your super will mostly likely make up a major portion of your retirement savings, so increasing it while you’re still working is like making a payment to your future self.

Important information

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Although this information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.