Australian Retirement Planning: Top 3 Tips

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How much money do you need to retire in Australia? What are some considerations for Australian retirement planning?

Australia is hardly a cheap country to spend your retirement. To retire comfortably, singles will need will need an estimated $43,317 and couples—$60,997 per year. With this in mind, the earlier you start planning your retirement, the better off your golden years will be.

Here are three pieces of advice Australian citizens should consider when planning their retirement.

Australian Retirement Planning Tips

The Australian government estimates that its citizens need the following amount of money each year of retirement to be able to live comfortably: $43,317 for singles and $60,997 for couples. The following retirement planning tips will help Australian citizens reach these figures faster to be able to enjoy a peaceful and comfortable retirement.

1. Pay Your Mortgage Early

Due to interest payments, you’ll pay more than the cost of your home over the lifetime of your loan. To limit how much interest you pay over the life of your mortgage, work to pay it off faster. You can also try calling your bank to negotiate a lower rate. Tell the bank that you’re planning to switch to another bank with a lower interest rate unless they give you a 0.5 percent discount. This step is best attempted when you already own 20 percent of your home.

2. Save Enough Money in Super

  • Singles: $170,000
  • Couples: $250,000

In Australia, when you retire, you’re required to withdraw 5 percent of your super per year, or $12,500 for couples, to start. This amount increases slightly as you age because the government doesn’t want you hoarding your money.

These previous figures represent the maximum amount you’re allowed to have in assets—excluding a paid-off home—to qualify for the highest annual pension, which is:

  • $24,081.20 for singles
  • $36,301.20 for couples

(Shortform note: Australian pensions are similar to Social Security in the U.S., except how much an individual receives depends on assets rather than on earnings in their lifetime.)

3. Continue Working

Just working a day or so per week is plenty to bring in some extra cash. Plus, studies indicate that retirees who continue doing some kind of work have better mental health than their non-working counterparts.

The Australian government provides a special perk to encourage you to continue working once you retire—you can earn up to a certain amount without paying income tax:

  • Singles: $32,279
  • Couples: $57,948

But you don’t need to earn nearly that much to be comfortable. For a couple, if each of you only worked one day per week, you’d earn about $300 per couple per day of work, for a total of $15,600 per year.

If you follow these three steps, you’ll have roughly this amount per year of your retirement:

  • Part-time work: $15,600
  • Super: $12,500
  • Pension: $36,301.20
  • Total: $64,401.20

That’s about $3,400 more than the government recommends for a comfortable retirement.

Australian Retirement Planning: Top 3 Tips

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Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.

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