If life is what happens when you’re making other plans, retirement is no exception. If you are in a position to put your plans for retirement into action - health, wealth and happiness are all up there as things to think about. From finances to feelings about leaving work, this article is all about the things to keep in mind when planning for life beyond the 9 to 5.

1. Are you ready for change?

A job can be more than a way to get paid. When colleagues and career mean more to you than the money, moving on can be tough. If you’re expecting retirement to leave a big gap in your life, planning new routines, rewards and friendships will boost your sense of optimism and wellbeing. By thinking about this ahead of time, and even taking steps to explore options, you can feel like you’re swapping a positive experience of working life for something even better.

2. Is it the right choice for your health?

Whether you love your job or can’t wait to retire, your health could force the issue. Depending on the type of work you do, retiring early may become the only option when health problems are in the picture. The same may be true if you need more time to care for a partner in poor health. So it’s no wonder the Australian Bureau of Statistics (ABS) reports personal health as the second most common reason for retiring¹.

3. Consider how much you'll need for retirement

The same ABS figures show that for people intending to retire, the main factor that will influence their decision about when to retire was financial security. Knowing what you’ll spend in retirement and where that money will come from can give you confidence that you’re financially ready to make the change.

4. Is part-time work still an option?

Continuing with paid work in retirement can be a way to stick with a routine you’re comfortable with and make your super last longer. If you’re eligible for the Age Pension, it’s good to know you can still earn some income without your payments being affected up to a certain level (this is called the income test threshold). There is also the Work Bonus that allows you to earn income up to a certain threshold without reducing your Age Pension. And if you take a break, you can build up your Work Bonus balance and earn more when you start working again.

Visit the Department of Human Services website for more on the Work Bonus and the latest on eligibility, thresholds and balance limits.

The 2020 Retirement Income Review found that those aged 55-64 underestimated their life expectancy by almost five years.

5. How long will you spend in retirement?

Freedom from working life can be a positive, even if it happens sooner than expected. But it can create problems for your finances when your time in retirement stretches into several decades. Australians are living longer due to improvements in medical care and living standards. The average life expectancy has risen in recent years and continues to increase, particularly for people over the age of 65. And unless living longer runs in the family, most people tend to underestimate just how long they’ll live.

How many more years are you likely to need to plan for? Challenger estimates that an Australian male aged 65 could expect to live to 88, while a female aged 65 could expect to live to 90.

¹ Australian Bureau of Statistics, Retirement and Retirement Intention, Australia, 2020-21.

² Estimates calculated using Australian Life Tables 2015-2017 with 25-year mortality improvements as provided by the Australian Government Actuary. There is a 50% chance of living for this number of years at these ages.

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