The days of hitting 67, packing up the tools or the desk and heading off into the sunset are no longer the norm. Recent studies have shown that over 60% of Australians intend to continue working after the official retirement age. This is motivated by two primary reasons: financial and social. We are seeing a growth in the number of our clients who are preparing for a phased retirement rather than coming to a complete stop.
Financial security matters
One of the primary reasons people opt for phased retirement is financial security. By continuing to work part-time, you still have money coming in, so you don’t have to drain your superannuation or savings immediately. This way, your nest egg lasts longer. With Australians living longer than ever, those extra earning years can help your money stretch further. Keep in mind: if you’re on the Age Pension, income from a part-time job could affect your payments. The government’s Work Bonus lets you earn a bit without reducing your pension, but beyond that, your pension might taper off. It’s essential to consider this when planning.
Another big reason is lifestyle and purpose. Work isn’t just about a wage; it gives structure, social connections, and a sense of achievement. Stopping work suddenly can leave you feeling adrift once the initial holiday glow wears off. Phasing out helps avoid that abrupt drop. You still work a few days, staying active and connected, but you also have extra time to relax or try new things. You might take up a hobby, spend more time with family, or volunteer, essentially test-driving your retirement life while maintaining a work-life balance. Overall, you stay engaged and fulfilled, rather than experiencing a sudden drop-off.
Flexibility is part of the modern way of living
A phased or gradual retirement offers flexibility, allowing you to design a retirement routine that suits you. By cutting down your work days, you can arrange your week in ways you never could while working full-time. Maybe you’ll take long weekend camping trips or spend Wednesdays with the grandkids. You might work just three days, or shorten your daily hours, whatever frees up time for you. One of our clients fishes on Mondays and Thursdays and works the rest of the week. For him, it’s the perfect balance of leisure and work. He’s far less stressed, since he isn’t cramming all his fun into the few weeks of holidays each year. He’s already living his retirement dreams now. And remember, you can always tweak your schedule further when you’re ready.
How AFPG helps you
Everyone’s situation is unique, and that’s where Australian Financial Planning Group comes in. We specialise in helping pre-retirees craft a retirement plan that fits their life and goals. If you’re considering a phased retirement, we can provide tailored advice on everything from superannuation and transition-to-retirement strategies to overall wealth planning.
In practice, this might mean reviewing your super to ensure you’re getting the most out of it, setting up a smart TTR strategy, and providing all the components of your wealth plan, including your investments and any Age Pension entitlements, are aligned with your new lifestyle.
We’ll also cover the practical stuff, like how a part-time wage could affect your tax or pension, and what changes to make to your budget. We aim to provide you with a solid plan, enabling you to step into semi-retirement with confidence and enjoy the fruits of your labour. Ultimately, it’s about retiring on your terms, and we’re here to help make that happen.
We can help
Step Up Financial Group, now AFPG, has the expertise to guide you with a professional transition to a retirement plan. We’ve helped hundreds of retirees and pre-retirees make informed decisions that enable them to live a lifestyle of their choosing.
Contact us today for experienced, compassionate, and professional estate planning advice.