Retirement Income Planning: How to Make Your Money Last

Retirement planning isn't just about accumulating the biggest possible super balance. Eventually, the question changes from "How much can I save?" to "How do I turn my savings into reliable income?"

That's where retirement income planning becomes important.

Where will your retirement income come from?

Depending on your circumstances, retirement income may come from:

• an account-based pension

• the Age Pension

• cash and term deposits

• shares and managed investments

• investment property

• annuities or lifetime income products

• part-time employment.

Moneysmart notes that super, the Age Pension, work, personal savings and investments, and potentially home equity can all contribute to retirement income.

How much income will you need?

Start with your expected expenses rather than an arbitrary super target.

Separate spending into essential costs, such as housing, food and healthcare, and discretionary spending, such as holidays, restaurants and entertainment.

Then allow for larger irregular expenses including cars, renovations and family assistance.

Managing investment risk in retirement

Retirement doesn't necessarily mean moving everything into cash.

Your money may need to support you for decades, which means balancing short-term income needs against inflation and long-term investment growth.

The right balance depends on your capacity and willingness to accept investment risk.

Create an income strategy before retiring

A good retirement income strategy brings your super, investments, tax position, spending and potential government entitlements together.

The goal is not simply to retire with money. It's to create an income that gives you confidence to use that money throughout retirement.

General information only. Investment returns and retirement income are not guaranteed.