Client Login
It’s never too early to start preparing for your retirement, and there are plenty of ways to do so, so there’s no reason not to. After all, as the economic landscape shifts with housing and healthcare costs, relying solely on pensions can be daunting. From liquidating your assets to finding a stream of passive income, having the financial freedom to maintain your lifestyle after you stop working makes a huge difference in your quality of life.
If you’re preparing for retirement and looking into the types of retirement plans in Australia, you’re at the right place. Let’s explore!
Types of Retirement Plans in Australia & Why They Matter
According to the Australian Bureau of Statistics (ABS), people intend to retire at an average age of 65.4 years, and an ATO report covering the 2021 financial year shows an average of $428,738 and a median of $207.540 in super balance for ages 65 to 69. Although that’s a considerable sum, having a contingency plan for unexpected expenditures differentiates a modest post-retirement lifestyle from a comfortable one. At the end of the day, retirement looks different for everyone, which is why finding the best investments for retirement income in Australia matters.
1. Superannuation & Account-Based Pensions
For many Australians, super is the base of their retirement income. Built up over time, it lets you turn your balance into an account-based pension once you reach retirement age, meaning a steady income where you can choose how often you’d like to receive payments. Plus, it’s tax-effective with perks such as concessional contributions taxed at a lower rate compared to the marginal tax rate and government co-contributions for lower-income earners.
Unsure how to maximise your super with the right investment mix? A superannuation financial advisor can clear things up, structuring your account to last.
2. Government Age Pension
For eligible individuals, the Government Age Pension can support your retirement income. It’s means-tested, so your age, assets, and income will affect how much you receive.
When it comes to retirement plans in Australia, the Age Pension alone may not cover all your living costs but can work well when paired with your super or other income sources. A retirement financial planner can help set up your finances to make the most of your entitlements while keeping your investments on track.
3. Australian Shares with High Dividends
If you’re looking to grow your wealth and another finance resource, Australian shares are worth considering. Some companies pay out regular dividends, which can provide a solid income stream. For example, the dividend yield on the ASX200 is around 4.2%, and franking credits can boost your return even more.
Shares can add to your retirement savings, although the market comes with volatility and fluctuations. If you're comfortable with short-term ups and downs in exchange for better long-term capital gains, they may be a solid choice.
4. Term Deposits & High-Interest Savings Accounts
Prefer something lower risk among retirement plans in Australia? Term deposits and high-interest savings accounts are some more appealing options. Thanks to recent interest rate hikes, you can now earn 4 to 5% p.a. on your savings with little to no risk to your capital.
They won’t grow your wealth dramatically but are great for covering short-term expenses or building a buffer for emergencies with predictable income.
5. Credit & Mortgage Funds
Credit and mortgage funds are also commonly considered when discussing the best investments for retirement income in Australia. They work by pooling money from investors and lending it out to property buyers or developers. Compared to bonds, they’re higher on the risk scale but usually deliver higher returns with yields of 7 to 12% p.a.
6. Personal Assets & Property
Personal assets, like investment properties or shares held outside of super, can also fund your retirement. Whether it’s rental income, downsizing, or selling investments, managing your personal assets can add flexibility and financial support.
This can be especially helpful if you’re planning for aged care or need extra income down the track, and if that’s the case, it’s worth getting aged care financial advice to make sure everything’s set up correctly.
Build Your Investment Portfolio with Inovayt
The ideal investment mix varies, depending on your goals and lifestyle—what matters most is managing your portfolio risk and having a strategy that works for you. Retirement is about enjoying well-earned time off on your terms. Our financial planners at Inovayt can help you build a solid retirement plan so your retirement is exactly how you’ve pictured it.
