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Planning retirement starts with the income you will need
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Overview
Your super balance is one part of the retirement picture. A clearer plan starts with what life will cost, when income will arrive and which funds you can actually access.
Build the budget around your own life
Start with your current spending and mark what may change. Commuting could fall while travel, healthcare or support for family might grow. Separate regular costs from larger expenses, such as replacing a car or repairing a roof.
There is no single amount everyone needs to retire. A household with a mortgage and plans to travel will have different needs from one with lower housing costs. Include tax and the costs of managing your investments or SMSF.
Map when the money becomes available
Stopping work does not automatically make all your super available. You need to meet a condition of release. Access to super and eligibility for the Age Pension also follow different rules.
For an SMSF, look beyond asset values. A property may provide rent but still leave the fund short of cash for a pension payment, repairs or a vacancy. Record when income is expected and when larger payments fall due.
Test a few realistic changes
Compare retiring on your preferred date with reducing hours first or working longer. Then test higher living costs, a period without rent or a large unexpected expense. These are planning scenarios, not predictions of investment performance.
Use the results to identify questions for your accountant and licensed financial adviser. A cash flow forecast can support the decision, but choosing investments, starting a pension or changing super arrangements requires advice suited to your circumstances.
