Retiring earlier than planned?

Patricia, 59, planned to work until she was 63 but was recently made redundant from her role. She has $320,000 in super and had hoped it would grow to about $400,000 by retirement. Her husband Paul, 61, plans to retire at 65 and they had been hoping they would retire together.

Patricia’s worried an earlier retirement will affect their plans, but realistically she feels finding another job in her field at her age is unlikely.

She received $70,000 as her final redundancy payment.

What could Patricia do next?

• Check the immediate picture: can she and Paul live on his income for the next year while she considers her options? That would give her money to live on before she’s able to use her super.
• Look at topping up super: can the $70,000 redundancy be put into super using the concessional and non‑concessional contribution rules (including the bring‑forward arrangement)? If so, that could bring Patricia closer to her target super account balance.
• See what government support might be available before she is able to use her super at age 60 (income support, pensions, or jobseeker-type payments where eligible).
• Re-run retirement projections with the earlier drawdown date to see how three extra years outside the workforce affect their joint retirement income and lifestyle plans.

Chrissy, 60, planned to work until she was 67. Over the past year she’s been supporting her elderly mum after a series of falls and medical appointments. Full‑time work became too hard to manage. Chrissy resigned and has been looking for part‑time work – so far without success. She’d hoped to use the next few years to rebuild her super after taking time out to raise children. Those plans are uncertain.

What this means for Chrissy

• Retiring seven years earlier than planned is likely to have a significant impact on Chrissy’s future income and lifestyle choices.
• If she expects to rely on the Age Pension, she may need other income to get by until she reaches eligibility age at 67.
• She may need to reconsider retirement expectations and keep the door open to working part‑time in the future when her circumstances allow.

What are Chrissy’s options?

• Reassess short‑term finances: identify essential expenses and see how long current savings and any household income will stretch.
• Keep looking for flexible work: casual or part‑time roles, contract work, or freelance roles might become possible as her caring duties change.
• Check government support: investigate Centrelink benefits or carer support while she’s providing care – there may be entitlements or concessions that help.
• Consider a mix: part‑time work plus a small, managed drawdown from super can reduce the strain on savings and preserve growth potential.
• Use super as a bridge: drawing an income stream from super now can help cover living costs. If you’re 60 or over, retirement income is generally tax‑free, which can make this an efficient option compared with earning the same money from a salary that is taxed. Watch this video

There are pros and cons to using super now:

• Using super in the form of a retirement income now will mean that the income she takes out will be tax-free.
• However, using super now will take away from the ability for it to grow and last longer.
  
  

The rules are complex and everyone’s situation is different. Making sure that you are making decisions that are best for you, we suggest you speak to a financial adviser.

Cliff, 61, has worked as an electrician for years, but climbing ladders is becoming unsafe and his current employer can’t offer him a different role. After checking other workplaces, he feels he has no realistic alternative but to stop working – even though he’d planned to keep working until at least 64, when his youngest would be 21 and he expected to be comfortably retired.

Right now, his projected super balance at 64 would be about $750,000. His wife Maude, 60, works part‑time in real estate and earns $70,000 a year. Retiring three years early changes the timeline, so it’s worth looking at what that means in practical terms and what choices they can make.

What are Cliff’s options?

• There are three years extra for Cliff to fund but as he is over 60, he can already access his super. And as he is intending to fully retire, there are no restrictions on how much super he can access.
• He will need to re-do his numbers though, because if he is drawing on super earlier than expected it will not have reached his target retirement amount he wanted to retire with. This will mean that either his income will be less than he had hoped, or will not last as long. Cliff can re-run his retirement numbers through the Retirement Income Simulator.
• There may be government support that he is eligible for, but eligibility and timing matter, so he will need to check current rules.
• There is an option for Maude to use some of her salary to boost his super or make up for some shortfall in their earnings. She might also choose to work more hours if possible, for a short period of time.
• Talking it through can help. Request a call and our super specialists will explain your options in plain language and suggest practical super strategies.