UBCNews - Business - Are You Financially Ready To Retire? Pre-Retirement Checklist For Australians

Episode Date: February 25, 2026

Welcome back, everyone! Today we're tackling a question that keeps so many people up at night: Are you actually ready to retire? And I mean, really ready. Not just financially, but emotionally, too. I'm joined by a guest who's spent years helping folks work through this transition. So, let's get into it. First off, what's the biggest misconception people have about retirement readiness? Approved Financial Planners Pty Ltd City: Floreat Address: 7/437 Cambridge St, Website: https://approvedfp.com.au

Welcome back, everyone. Today we're tackling a question that keeps so many people up at night. Are you actually ready to retire? And I mean, really ready. Not just financially, but emotionally, too. I'm joined by a guest who spent years helping folks work through this transition. So let's get into it. First off, what's the biggest misconception people have about retirement readiness? Great question. Most people think there's this magic number they need to hit, right? Like, once I have a million dollars in Super, I'm good to go. But retirement readiness is so much more than that single figure. You need to understand your lifestyle goals, your expected expenses,

and whether you've got multiple income streams to fall back on. The truth is, what works for one person might not work for another. Right, exactly. So the plan really needs to fit your situation. Now, I know a lot of Australians are genuinely concerned. recent research shows that 62% of people worry about not having enough money in retirement, and about 40% have no clear retirement plan at all, with another 29% having plans that lack detail.

That's quite concerning. Absolutely, and that gap is telling. People are anxious, but they're not taking the steps to figure out their actual numbers. I actually had a client a few years back, who thought he was nowhere near ready to retire. But after we sat down and did the math, he realized he'd been ready for two years. The first thing anyone approaching retirement should do is sit down and calculate their expected annual expenses.

Then compare that to their projected income from super, the age pension if they're eligible, and any other sources like rental income or dividends. Mm-hmm. Interesting. So let's talk benchmarks for a second. The ASFA retirement standard gives us some useful figures. right? As of March 2004, a comfortable retirement for a single person

requires about $51,630 per year, and for a couple, around $72,663. Those numbers assume you own your home and are in good health. Exactly, and for a more modest lifestyle, you're looking at roughly $32,915

per year for a single person and $47,300,300. $187 for a couple. These are helpful starting points, but again, your personal circumstances matter. If you're renting or have ongoing health expenses, your costs will be higher. Definitely. Now, one thing that often gets overlooked is debt. Entering retirement with a mortgage or credit card debt can really put a strain on your finances. What's your take on that? Debt and retirement is like driving with a handbrake on. It slows you down and makes everything harder. Ideally, you want to eliminate non-productive debt before you retire. Paying off your

mortgage, clearing credit cards, and settling personal loans should be top priorities. If you retire with a $2,000 monthly mortgage payment, you're going to need about $600,000 extra in retirement savings just to cover that at a 4% withdrawal rate. Wow, that's a significant chunk. So, debt freedom really accelerates your retirement readiness. In other words, getting rid of debt before you retire gives you so much more financial breathing room. Now let's talk about income streams. You mentioned earlier that having multiple sources is key.

Can you break that down for us? Sure. Successful retirees rarely rely on just one income source. You want to have a mix, superannuation, of course, but also consider the age pension, which you're eligible for at 67 if you meet the assets and income test. Beyond that, rental income from investment properties, dividends from shares, maybe even part-time work or consulting. The more streams you have, the more secure you'll be. It's like not putting all your eggs in one basket, except the basket is your retirement, and the eggs are, well, money.

Huh, I like that. And what about health care? That's got to be a big consideration, especially as we age. Oh, absolutely. health care costs typically increase significantly with age. Medicare doesn't cover everything, so you'll need to factor in private health insurance premiums, dental and optical expenses, medications,

and potentially age care provisions down the track. Budget generously for these increasing costs as you move through retirement. That's solid advice. Now, beyond the financial side, there's the emotional readiness piece. Retirement isn't just about stopping work. There's the whole question of what comes. comes next. How do people prepare for that shift? Great point. Emotional readiness is often underestimated.

You've got to ask yourself, what will I miss about work? What will I do with my time? Without your job title, how do you define yourself? These are big questions. Some people retire and feel lost, even returning to work because they miss the structure and identity it provided. Having a vision for your retirement, hobbies, travel, volunteering, whatever excites you, matters a lot. Yeah, that makes a lot of sense. And for couples, aligning your retirement plans is really important, right? You don't want to have one partner ready to go while the other's still working. Exactly. Couples need to have open conversations about timing, lifestyle goals, and how they'll spend their time together versus independently. Misaligned expectations.

can lead to friction. So hash those things out early. That point about having open conversations sets up our next piece, the transition to retirement strategy. But first, a quick word from our sponsor. Planning for retirement can feel overwhelming, but you don't have to work through it alone. Approved financial planners offers personalized financial planning services across Western Australia.

With over 20 years of experience, their services include retirement planning, retirement planning, superannuation management, investment strategies, and insurance solutions for individuals, families, professionals, and business owners. They help you determine your required retirement income and track progress toward your financial goals. Learn more at approvedfp.com.a.u. Picking up on those open conversations, how does the transition to retirement strategy actually work for someone who's not quite ready to stop working completely? Oh, it's a great option. Transition to retirement lets you gradually shift from full-time to part-time work.

Once you reach your preservation age, you can access part of your super as an income stream while still working. This gives you financial flexibility, lets you test the retirement waters, and can even be tax-efficient. Some people reduce to four days a week, then move to consulting, and eventually ease into full retirement. I love that, like a soft landing rather than a hard stop. Now let's talk about estate planning. This is something people often put off, but so important. Absolutely. Estate planning protects your legacy and ensures your wishes are carried out. You need an updated will, binding death benefit nominations for your super, an enduring power of attorney, and advanced care directives. And don't forget to have those conversations with your family

about inheritance and age care preferences. Not the easiest topic, but necessary. Right. Right. Definitely. So to wrap things up, if someone's listening right now and thinking, I want to retire, how do I start? What's the first step? And have you ever asked yourself that question? Start by understanding your retirement income needs. Calculate your expected annual expenses, review your superbalance, and figure out what other income sources you'll have. Use tools like retirement planners to model different scenarios. And honestly, consider speaking with a financial advisor who's specializes in retirement planning. They can stress test your plan and help you avoid blind spots. Perfect. And remember, retirement readiness is a combination of financial security, lifestyle clarity, and emotional preparedness. Thanks so much for joining us today. This has been incredibly helpful. My pleasure. Thanks for having me. And to everyone listening, if you're thinking about retirement,

Start planning now. The earlier you begin, the more options you'll have. Until next time, take care.