5 Essential Steps to Planning Your Retirement

Retirement is a significant milestone that requires thoughtful planning to ensure financial security and personal fulfilment. Here’s a step-by-step guide to help you navigate this journey.

Retirement means different things to different people. Some clients enjoy a minimalist lifestyle, spending time in their gardens or with loved ones, while others dream of a luxurious retirement filled with travel and new experiences.

Step 1 – Define Your Dream Retirement

Start by identifying what’s important to you. For example, many clients plan for a base level of $60,000 per year for essential expenses (equivalent to an $80,000 salary during their working years) while budgeting for larger goals like travel or replacing vehicles.

This step is crucial because your spending will determine not only when you can retire but how long your money will last. Not sure how much you’re spending now? Download our free budget template here.

Step 2 – Assess Your Retirement Funding Sources

Funding retirement involves leveraging your superannuation, savings, and other assets, alongside potential age pension entitlements. Start by evaluating your financial assets:

• Cash
• Personal shares and investments
• Investment properties
• Your home (if downsizing is an option)
• Superannuation
• Accrued annual or long service leave

If you plan to access the age pension, visit Services Australia to review eligibility criteria, including income and asset thresholds.

When can you retire? Retirement age depends on your financial readiness, not a specific date. However, two key benchmarks include:

1. Preservation Age (60): When you can access superannuation.
2. Age Pension Age (67): Eligibility for the government age pension.

Using the 4% Rule: Multiply your total financial assets (excluding your home) by 4% to estimate the annual amount you can safely withdraw. Remember, retirement may span 30+ years, so careful planning is essential.

Step 3 – Determine Your Risk Appetite

Balancing growth and safety in your investment portfolio is critical during retirement. Growth assets (e.g., equities) offer higher returns but involve more risk, while defensive assets (e.g., cash and bonds) provide stability and liquidity.

Your portfolio should reflect your risk tolerance and provide a sufficient return to fund long-term expenses. Protecting against market volatility with defensive assets ensures short- and medium-term security while maintaining growth potential.

Step 4 – Review Your Current Investments and Structures

Many clients neglect their superannuation or investment platforms, missing opportunities for optimisation. Regular reviews can improve access to better investments, tax efficiencies, and functionality.

Focus on these key components:

1. Diversification: Spread investments across asset classes (cash, equities, property, etc.) to minimise risk.
2. Fees: Compare platform and fund manager fees. Higher fees should align with superior functionality and investment options.
3. Long-Term Investing: Avoid reactive decisions based on short-term market fluctuations. Consider “bucketing” assets to minimise stress during market downturns.

Step 5 – Prepare Emotionally for Retirement

Retirement isn’t just financial—it’s also about finding purpose. Work often provides structure, social connections, and a sense of fulfilment. Consider how you’ll spend your time:

• Taking up hobbies
• Volunteering
• Spending more time with family
• Traveling

Ensuring you have a plan for your daily life can make your retirement truly enjoyable.

Next Steps

Planning for retirement can feel overwhelming, but you don’t have to do it alone. Book a complimentary 30-minute consultation with Willow Wealth Partners to discuss how we can help you achieve a secure and fulfilling retirement.