Managing Money in Retirement: Key Tips for Australians
Retirement planning doesn’t end once you finish your work life. In fact, managing your money well in retirement is just as important. With a little planning, your savings can go further, helping you enjoy the lifestyle you’ve worked hard for.
Around 62% of Australians aged 65 and over receive some form of government income support. But to maintain the lifestyle you’re used to, it helps to know the other ways you can make your money last.
In this article, we’ll cover simple budgeting tips, income sources available in retirement, and how to prepare for unexpected costs. We’ll also explain how Credit24 may offer flexible support when the unexpected happens.
Let’s explore how you can stay in control of your money and feel more confident about the future.
Why planning your money in retirement matters
Retirement can last 20 or even 30 years, so it’s important to think about how you’ll manage your money over time. Everyone’s setup is a bit different. You might receive income from your superannuation, part-time work, investments, or the Age Pension.
Costs like groceries, petrol, and electricity can rise over time. Healthcare can also become more expensive as you get older. And unexpected bills, like a broken car or a roof leak, can happen when you least expect them.
That’s why it helps to keep track of your spending and check in on your finances regularly. A little planning can help you feel more prepared and reduce financial stress during retirement.
If you’re looking to strengthen your financial confidence, you may find these guides useful:
Step 1: Create a retirement budget
Retirement changes how you spend your money. Some costs may reduce, like commuting, work clothes, or mortgage repayments if you’ve paid off your home. But other costs, such as healthcare, travel, and leisure activities, may increase. That’s why it’s important to build a budget that suits your retirement lifestyle.
A common guide is to aim for around 70% of your pre-retirement income. This isn’t a fixed rule, but it can be a helpful starting point. You can also explore resources like the ASFA Retirement Standard or Super Consumers Australia for typical retirement spending examples.
Your budget doesn’t need to be perfect. The goal is to create a flexible plan that helps you understand your income and expenses so you can adjust over time.
If you’d like a step-by-step breakdown of budgeting basics, read:
What is a budget?
Start by looking at your current spending
Track your spending for a few weeks to get a clear picture of where your money is going. This can help you build a realistic retirement budget.
Include items such as:
- Regular bills (electricity, groceries, phone, internet)
- Medical costs (including insurance premiums and prescriptions)
- Transport and lifestyle costs (including anything that may reduce once you stop working)
Plan for the things you enjoy
Retirement isn’t just about covering essentials. It’s also about making room for the lifestyle you want.
Consider budgeting for:
- Occasional travel or weekends away
- Activities with family and friends
- Hobbies, community groups, or classes you’ve always wanted to try
Setting aside money for these expenses can help you enjoy retirement without putting pressure on your essentials later.
You might also find this helpful for planning ahead:
Financial goals: how to set and stick to them
Plan for the unexpected
Even with a solid plan, surprise costs can still happen. A car repair, a leaky roof, or unexpected dental work may affect your cash flow.
It may help to:
- Build a small emergency buffer
- Set aside money for irregular costs like home maintenance
- Review your budget regularly and adjust when needed
If you want help getting organised, you can use free tools like the Moneysmart budget planner or another simple budgeting tool. These can help you map things out quickly and identify areas where you may be able to reduce spending.
Step 2: Identify your retirement income sources
Once you’ve created a budget, the next step is understanding where your money will come from in retirement.
For most Australians, retirement income comes from more than one source. Knowing what’s available can help you plan more confidently and make informed decisions.
Superannuation
For many Australians, superannuation is the main income source in retirement. It’s money saved throughout your working life, and you can generally access it from age 60 (depending on your preservation age).
You may be able to access your super as:
- A lump sum
- A regular income stream
- A combination of both
Some people choose to withdraw part of their super for larger expenses while leaving the rest invested. This approach may provide flexibility, depending on your circumstances.
In many cases, once you turn 60, super withdrawals may be tax-free, but this depends on your situation and the type of fund.
Age Pension
If you’re 66 or older, you may be eligible for the Age Pension through Services Australia. It’s a regular payment designed to support eligible Australians with everyday living costs.
The Age Pension is means-tested, meaning Services Australia considers your income and assets to determine eligibility and payment amounts.
Even if you have superannuation or investment income, you may still qualify for a part pension depending on your circumstances.
Other ways to bring in income
Some retirees also receive income from:
- Part-time or casual work
- Rental income from property
- Dividends from shares or managed funds
- Interest from savings or term deposits
- Annuities or lifetime income products
- Family support or inheritance
The right mix depends on your goals, health, lifestyle preferences, and financial situation.
Step 3: Check what payments and discounts you may be eligible for
Government support can help with day-to-day retirement costs. Even if you have income from super or other sources, you may still qualify for certain payments or concessions.
Government payments
The Age Pension is the main government payment for Australians aged 66 and over and is generally paid fortnightly.
Depending on your situation, you may also be eligible for:
- Carer Payment (if you provide full-time care for someone)
- Disability Support Pension (if you have a long-term medical condition)
Right now, around 62% of Australians aged 66 and over receive some kind of government income support. To check what support may apply to you, visit Services Australia.
Concession cards
You may also be eligible for concession cards, which can help reduce everyday expenses and provide discounts on services such as:
- Public transport
- Prescriptions and medical services
- Utility bills
- Council rates
- Vehicle registration
Common concession cards include:
- Pensioner Concession Card (for people receiving the Age Pension)
- Commonwealth Seniors Health Card (for eligible self-funded retirees)
- Seniors Card (available through your state or territory)
These discounts may help stretch your retirement budget further, especially when combined with a strong spending plan.
Step 4: Choose how to use your super in retirement
Ways to access your super
You don’t necessarily need to withdraw all your super at once. Depending on your needs, you may choose to:
- Leave your super invested (which may allow it to continue growing)
- Start an account-based pension (regular income payments)
- Withdraw lump sums as needed
- Purchase an annuity for more stable income
- Use a Transition to Retirement (TTR) strategy if you’re still working part-time
- Combine different options for flexibility
Factors to think about
When deciding how to access your super, it may help to consider:
- Your age and how long your retirement may last
- The lifestyle you want to maintain
- Other income sources (Age Pension, investments, work)
- Tax implications of different withdrawal methods
- Your comfort with investment risk
- Whether you prefer stable income, flexibility, or both
- Estate planning and what happens to your super when you pass away
You don’t need to decide everything at once. Many people adjust their retirement strategy as their circumstances change.
If you’re unsure where to begin, speaking with a licensed financial adviser may help. They can explain your options based on your personal situation and support you in making informed decisions.
Making the most of what you’ve got in retirement
A few practical habits can help you stay in control of your finances in retirement while still enjoying your lifestyle. Here are some common ways retirees manage their money effectively.
Regularly review and adjust spending habits
Small check-ins can help you track spending and spot areas where changes may reduce pressure on your budget.
Take advantage of eligible concessions and discounts
Concession cards and senior discounts may reduce ongoing costs like transport, utilities, and healthcare.
Consider downsizing your home to free up equity
If your home is larger than you need, downsizing may reduce maintenance costs and potentially free up funds.
Maintain an emergency fund for unexpected costs
Setting aside a buffer may help you handle unexpected expenses such as car repairs, dental work, or appliance replacement.
Be cautious with large one-off expenses
Spreading out major purchases may reduce the impact on your savings and cash flow.
Shop around for better deals on insurance and utilities
Comparing providers may help you find better value, depending on your needs.
Use senior discounts wherever available
Small discounts can add up over time and may support a more sustainable retirement budget.
Avoid high-interest debt
High-interest credit can reduce your available funds quickly and may make it harder to stay on track financially.
Consider timing of major purchases
Planning ahead can reduce financial pressure and help you make more informed decisions.
Keep some investments for long-term growth
If you don’t need to access all your savings immediately, keeping part invested may support longer-term retirement needs (depending on your risk tolerance).
If you're currently working on improving your budgeting habits, you may also like:
Credit24: Support for unexpected retirement expenses
Even with careful planning, unexpected costs can still happen, such as a medical expense, urgent home repairs, or replacing a broken appliance. If you’re living on a fixed income, these costs may place pressure on your budget.
In some situations, a personal loan may be one option to consider, particularly if you need to cover an essential expense and prefer to spread repayments over time.
Credit24 may offer small personal loans up to $10,000 (subject to approval and eligibility criteria). Repayment options may be available to suit different circumstances, including customers receiving the Age Pension.
The application process is online. Any applicable fees, charges, and repayment details are explained upfront before you accept the loan. All applications are assessed individually, and lending is subject to responsible lending requirements.
If you're interested in learning more about loan options, you may find these pages useful:
If you want to apply, you can start here:
Apply now
Disclaimer
IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839.
The information in this article is general in nature and does not consider your objectives, financial situation, or needs. Lending criteria, fees, and charges apply. For product details, eligibility requirements, and full terms and conditions, visit www.credit24.com.au.
