Developing a financial countdown to retirement

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The best way to have financial security in retirement is to start working on it well before you get there. You’ll want a financial stream (or streams) that allows you to fulfil many of the dreams you have for the freedom retirement brings.

This is where a financial countdown can help. You’ll find a stack of them online, but here’s a suggestion that’s adapted from several of them. These timelines set out an ideal. Life can spring surprises that may mean adapting your countdown, but having a process you can adapt is important.

15 years before retirement—develop a financial plan

Obviously, the earlier you start beginning to prepare financially for your retirement, the better. Australia’s superannuation system helps employees do that with payments going regularly into their super fund.

While other things (schooling of children is a prime example) may demand attention earlier than this, it’s important that some thought is given to retirement finances about 15 years before you retire. This is time enough to work on a realistic plan to build funds for retirement.

You will want a regular payday when you retire. How will you create it? That’s the question you’re attempting to answer in this process.

If you have little understanding—or interest—about things financial, it’s worth a visit with a financial planner. Financial planners will know how to best set up your finances to take advantage of government regulations. This could make a huge difference with your retirement’s bottom line.

Don’t forget to monitor your progress during these years—to see if you’re succeeding.

3 to 5 years before retirement—pay off debt

Becoming debt free begins with high-interest credit card debt.

You won’t want to take a mortgage into your retirement, so is it possible to pay it off—or have a plan that will allow you to pay it off before you retire?

Again, if you’re not sure what to do to gain the best advantage, consult with your financial planner. Get help when necessary.

This is also a time to make some definitive plans for your retirement so you’ll be able to think about the costs involved. And to think about the timing of your retirement. Do you desire to retire early? Or late? Or continue part-time? Or do you have something else in mind? What impact would those kinds of decisions have on your retirement finances?

1 year before retirement—set up an income stream(s)

Of course, these won’t start until you retire, but you do need to know what your income will be. You want a regular payday (or paydays, with various streams) to cover costs.

This is the time to look at the sources of your income; how the process works; how you need to set it up; and, roughly, how much it will be.

This process will also tell you if you’re eligible for an age pension.

There are some questions to ask such as: is there any financial advantage to having non-urgent medical treatment before retirement—including dental and optometry? What will you do about any accumulated holiday time or long-service leave? Are there advantages in taking leave before or after retirement?

3 months before retirement—sign up for the age pension

If you’re eligible for the age pension, it takes time for this to be put in place (not usually three months, though, but it helps to discuss it early, so you know how much you will have to work with). Do it early enough so you can receive your pension payment on the first pension day of your retirement.

Last day of work

Turn off the alarm on your Retirement Countdown Clock (yes, there is an app for that).

This is your desk-clearing, bench-clearing, work-room clearing day. People will say nice things about you—even the boss. It’s time to say goodbye.

It’s now time to start living the next phase of your life. And if you’ve followed a financial plan something like the one above, you should have financial security for the future.

Bruce Manners: the author of Retirement Ready?, Refusing to Retire, and founder of

Category: Finances, Planning

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