Retirement in Australia requires careful planning. A retired couple stand together with cups of coffee considering their finances.

What’s the Best Way to Plan for Retirement in Australia?

Avatar Steve Becker
Steve Becker is the Founder and CEO of LendEasy, a premier independent finance brokerage dedicated to helping working professionals and families secure optimal financial solutions. With over 15 years of experience, Steve and his certified team have been committed to supporting everyday Australians in achieving their financial goals through expert guidance and personalised service.
And how are pensioners changing?

People in retirement in Australia are at an all-time high; about 16 percent of the country’s population. That’s significantly higher than in past years and means something different than twenty or ten years ago. 

Today’s retirees are more technologically proficient, open to working in their golden years and facing a very different situation than their predecessors. Most importantly, Australia’s pensioners face an entirely new landscape of expenses and investment opportunities than any other generation. 

Here’s an up-close look at retirement in Australia today. 

Retirement in Australia: 2021 stats

For the first time, Australia is seeing a rise in a massive retiree class of citizens. Thanks to expanded life expectancy, about 83 years, a large part of our country’s population will now need more access to pensions and jobs conducive to their new lifestyles.

As baby boomers leave the workforce, Australia will see a tip towards a shortage of workers for the first time in its history. The current decade’s pressure on the country’s Age Pension will see a massive surge as over 16 million individuals go into retirement. This isn’t expected to balance out until the year 2040. 

Another big change is the number of people choosing to stay in the workforce beyond the retirement age of 65. It’s estimated that Australians of retirement age who chose to stay in the workforce in November 2020 numbered 616,000, up from 90,000 in November of 1980.

This is also the most educated generation to retire. Most baby boomers in the country have university degrees and experience with knowledge jobs, which are more conceptual and complex. 

Hopefully, this increase in education will counterbalance the need for excess funds as more people build up a fund for retirement in Australia. 

The best plan for retirement in Australia

A good retirement in Australia requires that you follow the 10/30/60 rule. Created by American D. Don Ezra in 1989, the rule states that you should earn money for retirement in three phases:

  • 10% from personal savings built up during your career
  • 30% from any investment returns paid out before you retire
  • 60% from any returns paid out after you retire

With the pressure on for you to earn via investments and returns after you reach retirement age, you need to know what funds will work for you and keep you secure despite a fluctuating market. 

You have lots of great options when it comes to different funds. A fund is a high-interest savings account where you can put your money and let it increase in value over time. The ideal amount of time to save is ten years, but more or less is certainly an option. 

Your fund earns money as a manager uses it to make investment decisions on your behalf. This helps a lot of people with their retirement in Australia because it compounds their interest, or builds on the money they already have tucked away. If you can put off eating into your main account for as long as possible, you can confidently invest your money and give yourself a nice nest egg for your later years. 

What you need to know about funds and risk profile

Once you start investigating funds, you’ll run into the phrase risk profile. Your risk profile is a technical term for how likely you are to take a leap with your money. If you’re open to investing in riskier but potentially rewarding opportunities, you fall into the All Growth, High Growth, or Growth categories. People who like the idea of taking some risks, but not too many, are labeled Balanced. Anyone who feels completely risk-averse falls into the Conservative column.  

Retirement in Australia gets more expensive every year, so you may want to push your working capital into those high-risk categories. Make sure you have a good manager and a firm you trust if that’s the road you want to travel. 

When it comes to funds, you have ten options that, as of June of 2022, are high performing:

              Pension fund   Investment option     Return

Cbus SuperGrowth10.0%
Australian Retirement TrustBalanced9.8%
TelstraSuperLifestyle Balanced9.6%
Prime SuperBalanced9.6%
Care SuperBalanced9.5%
Legal SuperGrowth9.4%

Source: Chant West

Do you need help planning your retirement in Australia?

Contact us at LendEasy today to get your funds in order and breathe a little easier. Don’t go into your golden years with pennies – put your money to work for you with a plan and good information. Contact one of our devoted professionals to get started today. 

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