Your guide to budgeting for retirement

To help you enjoy your retirement years, it’s important to plan ahead and take control of your finances early so that you can afford to live the lifestyle you want.

Working out your financial needs in retirement can be challenging, whether you're retiring soon or far in the future – but we’re here to help.

Here are five things you can do now to start planning and budgeting for your retirement.

1. Work out how much money you’ll need

How much you’ll need depends your expectations of retirement.

The Association of Superannuation Funds of Australia (ASFA) reports regularly on the costs of achieving either a ‘modest’ or a ‘comfortable’ standard of living in retirement.

You can also use our Retirement planning calculator for an estimate of how much you’ll have when you retire, and how long it will last.

By using this information as a guide, you can get an idea of whether your current savings will be enough, or whether you need to take action to grow your retirement savings.

2. Consider the long-term costs

When planning your retirement, it’s important to consider both your immediate expenses and your long-term costs. One of the largest costs in later life is aged care. If you move into an aged care home, you may have to pay accommodation charges and fees for services, which are likely to be ongoing. You can find more information on aged care services and costs on the MyAgedCare website.

According to research by the Australian Bureau of Statistics, the average life expectancy for a 65-year-old man is about 19 more years, and 22 more years for women1.

These statistics don’t take into account your individual circumstances, so it pays to think carefully about how long you want your money to last.

3. Create a realistic budget

After you’ve worked out your estimated income and costs in retirement, you can start to take control of your finances by creating a budget.

Setting a budget for yourself will help you track your spending, stay on top of your bills and work out how to afford the things you want.

MoneySmart has some useful resources to help you set up and use a budget. You might like to try their online budget planner tool or follow these simple steps on how to do a budget.

4. Track your spending

Here are some tips from The Australian Securities and Investments Commission (ASIC) on what you can do to make sure your spending fits in with your savings goals2:

Match your budget with your bank statement

Check your bank statements by looking at the money coming into your accounts and the money going out, to see if your budget truly reflects your spending.

Keep a spending diary

Make a note of everything you spend for a period of time such as one pay or benefit period. This will give you a good idea of your everyday spending, and will only take a few minutes a day.
If you have a smartphone, you can download ASIC’s free spending tracker to help you.

Check for spending ‘leaks’

These are small regular purchases, like a morning cup of coffee, that add up over time. You don’t have to cut them out completely. Instead, choose one or two things to cut back on, or ways to spend smarter. For example, you could dine out less often, and compare providers for services like insurance and energy, to make sure you’re getting the best deal.

5. Make the most of your retirement income

Once you have an idea of how much you’ll need, think about where your money is going to come from - and how you can make it last.

Your retirement income can come from many sources, including:

  • Your super
  • Investments other than super
  • Part-time work
  • The Age Pension
  • Selling or releasing equity from your home (if you own all or part of the value of your home)

You’ll find information on our website to help you grow your retirement savings and invest in your super in retirement.

To understand more about your income sources and how each source can impact others, it could be worth getting professional advice to suit your situation.

Need help with your retirement plans?

The financial aspects of retirement can be complex. It’s worth learning as much as you can about how to manage your money and afford your retirement years. You might like to:

Join a retirement webinar

Our range of 30-minute webinars explain how to plan and budget for your retirement, and answer the most common questions about making the most of your retirement income.

Come to a retirement seminar

If you’re looking to retire in the next few years, our range of retirement planning seminars provide information and general advice on your super and retirement options.

Discuss your plans with a retirement options expert

Once you’ve attended a retirement seminar or webinar, a face-to-face meeting with one of our experienced Retirement Options Service consultants could help you with the next stages of your planning.

Need help?

1 Australian Bureau of Statistics, Life Tables, States, Territories and Australia, October 2017, available at www.abs.gov.au.
2 Adapted from information published at www.moneysmart.gov.au.

Page last updated 22 May 2023

Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 23 April 2024.