Noel’s early retirement income planning tips

Frank has asked Noel Whittaker for guidance on early retirement planning.

Noel’s early retirement income planning tips
Frank has asked Noel Whittaker for guidance on early retirement planning.

Frank is planning an early retirement for him and his wife, and he’s asked Noel Whittaker if his retirement income calculations are ‘on the money’.

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Q. Frank
My wife and I will turn 56 this year. My plan is for us both to retire at the age of 57 or 58.

We have $575,000 combined in superannuation. My wife contributes $11,200 into super each year and I contribute $19,200 each year. We own our house ($500,000 estimated value). We also have an investment account of $265,000, which we will use to top up our super, and we both have long service with our employment.

We hope or plan to retire and live on approximately $60,000 cash per year until we are 60 years of age and then use our super funds’ pension scheme to draw about $60,000 per year or more, depending on markets, until we reach the pension age of 67 for top up, depending on the amount allowed by the assets test.


Do you think my plan is viable? And would it be safer to have our super accounts with the same company and with the same amounts in each account during super pension stage? And/or government pension time? Is there any advantage to this? At the moment we are with Australian Super and Care Super.

A. Your plan is viable, but what the pension regulations will be when you reach pensionable age is another matter. This is why you are wise in boosting your finances before you retire. I don’t think there is any question of safety with the major superannuation funds, and by keeping the number of accounts to a minimum, you are saving on fees. Just make sure you check out the insurance position before you close down one fund and roll the balance to another.

Do you have a question you’d like Noel to tackle? Email us at newsletters@yourlifechoices.com.au

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

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    COMMENTS

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    Karl Marx
    15th May 2019
    11:10am
    At the end of the day it all comes down to your life style & expectations in retirement. Travel can eat up money real quick whether it's travelling around Oz or overseas. Tben there are other things like new vehicles etc. Still need to budget so you know what your expenditure is & what it's being spent on.
    By all means start planning.
    Happy retirement
    Sundays
    15th May 2019
    11:47am
    You also need to have some rainy day money that you don’t touch. There will always be unforeseen expenses including capital replacement and medical. Noel doesn’t talk about a budget, but you should try and live on the $60k before you retire to make sure. That extra 4 years of work before you turn 60 could make a big difference to the rest of your life
    sunnyOz
    15th May 2019
    2:29pm
    Also have to give consideration to changes the Govt of the time will make. Super appears to be the perennial cash cow and plaything for governments, constantly changing.
    Karl Marx
    15th May 2019
    6:57pm
    Sunny Oz if we waited for possible changes we wouldn't do anything, sometimes you need to bite the bullet & make any adjustments if & when they do happen. But, yes keep your finger on the pulse for possible movement of the goal posts that governments seem to take a lot of joy in doing.
    KB
    15th May 2019
    2:30pm
    I agree with the replies. As you become older there may be hip or knee replacements. Without health insurance a hip replacement can cost up to $20 000 let alone hospital costs if you choose to do this privately.
    KB
    15th May 2019
    2:30pm
    I agree with the replies. As you become older there may be hip or knee replacements. Without health insurance a hip replacement can cost up to $20 000 let alone hospital costs if you choose to do this privately.


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