For some people, retirement has a date circled on the calendar. For others, the question comes up sooner than expected. Work may no longer feel sustainable, your health might change, or you may simply realise you’d like more time to enjoy life while you can.
When a client asks me, “Could I retire now?”, I don’t start with a target super balance. I start with what their life would look like if they stopped working and where their income would come from.
Early retirement may be possible, but it helps to work through a few questions before handing in your notice.
What would retirement actually cost you?
A useful first step is to look at what you spend now, then consider what might change when you retire.
You may spend less on commuting and work expenses. On the other hand, more free time could mean more travel, hobbies or time with family. You’ll also need room in your budget for irregular costs, such as replacing a car or making repairs to your home.
I encourage clients to think beyond a single annual spending figure. What would you like to do in the first few years of retirement? Which expenses are essential, and which could you adjust if needed? Those answers make the plan more personal and more useful.
How will you fund the years before the Age Pension?
If you retire early, there may be a gap between your final pay cheque and any Age Pension you might receive. The Age Pension currently starts at age 67, and eligibility also depends on other rules, including income and assets tests.
That means we need to look at how your savings, investments, superannuation and any other income could support you during those years. We also need to consider whether those resources can continue supporting you later in retirement.
For some people, part-time work is worth considering. It can ease the financial pressure while still giving you more freedom. It doesn’t have to be an all-or-nothing decision.
When can you access your super?
Being ready to leave work and being able to access your super are two different questions.
Generally, you can access your super from age 60 if you meet a condition of release, such as retiring or leaving a job. Other rules can apply depending on your circumstances. If you’re thinking about retiring before you can access super, you’ll need another way to cover your expenses in the meantime.
This is one reason I’d rather check the timing early. A plan that works beautifully from age 60 may look quite different if you want to finish work at 55.
What if retirement doesn’t go exactly to plan?
An early retirement plan needs enough flexibility to handle the unexpected. Investment markets can fall, costs can rise, and your health or family needs may change.
That doesn’t mean waiting until every uncertainty disappears. It means understanding what you could do if circumstances changed. Could you reduce some spending for a while? Would part-time work be an option? Are there larger expenses you could delay?
Testing those possibilities helps you make a decision with a clearer picture of the risks, rather than relying on one set of assumptions.
So, can you retire early?
There’s no single super balance or age that answers that question for everyone. Two people with the same amount saved could reach different decisions because their spending, debts, family circumstances and plans for retirement are different.
If early retirement has been on your mind, it’s worth exploring before you make a big change. We can look at what you have, what you’d like retirement to look like, and whether your income could support the years ahead.
Book an appointment with me, and let’s work through what retiring earlier could mean for you.
