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Are you retirement ready?

Imagining your retirement can be exciting - planning hobbies, travelling, spending more time with family and friends, maybe enrolling in a course for interest. But without good retirement planning, it can be difficult or even impossible to make your lifestyle dreams happen. In this article, we look at some strategies to get retirement-ready in an age when people are living longer.

Longer life, longer retirement

Today’s life expectancy for men is 80.4 years and 84.6 years for women1. People are living longer, healthier lives than their grandparents and many can enjoy a good lifestyle well into their eighties. With longer lives, a growing challenge for many people will be funding a longer retirement. ASFA suggests a retirement balance of $640,000 for couples and $545,000 for singles to fund a comfortable lifestyle.2 But actual superannuation balances at retirement are well below those required, with the median balance for Australians aged 60-64 of $154,453 (men) and $122,848 (women), and around 25% of women and 13% of men retiring with no super at all.3

The good news is that you can ease the path into retirement. With planning and financial advice, you can make some informed choices about your super, your investment options and your broader financial situation. If you’re thinking about retiring, one way to move into retirement is to start a transition to retirement (TTR) strategy, which allows you to cut back your working hours while maintaining your income.

Transitioning to retirement

The aim of TTR is to allow you to move into retirement while drawing on some of your super. You can work fewer hours while using a TTR pension to supplement your income - or you can sacrifice some of your salary into super to save on tax, boost your super, and use a TTR pension income to supplement your income.

TTR provides choice and flexibility in three main ways:

  • You can work fewer hours while maintaining your disposable income.
  • You can work the same hours while boosting your super savings through salary sacrifice and maintaining your disposable income.
  • The income you receive from your TTR pension is tax-free (if you’re age 60 and over).

Because a TTR strategy must be tailored to an individual’s circumstances, it’s important to get expert advice from a qualified financial planner.


Let’s look at the benefits of TTR more closely through a simple hypothetical case study:

  • Richard, 60, has a superannuation balance of $200,000 and works full time earning $65,000 (gross) per year. He wants to reduce his work days to four days per week while maintaining his take-home pay and lifestyle.
  • Using the hypothetical example below, Richard can use TTR to top up his lower gross income ($52,000) with income from his TTR pension account. The effect of tax savings on his TTR pension income will result in the same disposable (net) income under this case study ($52,133).
  • Alternatively, Richard could maintain his working hours and boost his super through salary sacrifice while receiving income from his TTR pension to maintain his disposable income/lifestyle.


Reduce work hours while maintaining your lifesyle

Reduce work hours while maintaining your lifestyle

Note: The tax payable above is calculated using 2019/20 tax rates including Medicare levy and relevant tax offsets



To achieve the best possible lifestyle in retirement - to be retirement ready - it’s important to ensure that you don’t undershoot your retirement income goal. To do this, you will need to know what to budget for, and what your retirement income and realistic costs might be. A qualified financial planner is best placed to help you budget and plan for income and costs

At VicSuper, you get superannuation and retirement advice at no additional cost in most cases. For more information about our advice services, go to Help and advice at

To learn more about how VicSuper can help you before and after retirement, go to In the mid-1930s life expectancy for men was 63.4 years and 67.1 years for women
2 ASFA Retirement Standard
3 ASFA ‘Better Retirement Outcomes: a snapshot of balances in Australia, July 2019

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