When Should You Retire? Key Financial Steps to Take in Your 50’s and 60’s

Thinking about retirement can feel exciting - and a little overwhelming. If you are in your 50’s or 60’s, chances are you have been steadily building your superannuation balance, paying off debt, and picturing what life after full-time work could look like.

But here’s the big question: How do you know when you are really ready to retire?

The answer isn’t just about hitting a certain age – it is about making sure your money will last as long as you do.

In this guide, we will cover some of the essential financial steps to take before retiring, so you can approach this next chapter with confidence.

Step 1: Get Clear on Your Retirement Lifestyle

Retirement planning isn’t just about numbers - it is about lifestyle. Ask yourself:

• Do you want to travel frequently, or enjoy a quieter home life?

• Will you downsize your home or stay put?

• Are you planning part-time work, consulting, or volunteering?

The lifestyle you imagine will directly impact how much money you will need each year. For example, someone who plans international travel might need a much higher budget than someone who is happy with local holidays and time with family.

Step 2: Know Your Superannuation Options

Your super will likely be your biggest financial resource in retirement. The good news is, you have choices:

• Stay in accumulation phase (if you are not yet drawing on your super).

• Transition to retirement (TTR) income stream – allows limited access to your super while you keep working.

• Start an account-based pension – giving you a tax-free income in retirement (subject to the $2 million transfer balance cap from 1 July 2025).

Getting advice before making the switch is crucial. Once you move into retirement, you will want to be sure your strategy maximises both income and tax effectiveness.

Step 3: Understand How Much Income You Will Need

As a rough guide, the Association of Superannuation Funds of Australia (ASFA) estimates that for a "comfortable" retirement in 2025, a couple aged 65 who own their home will need around $71,000 per year, and a single person who owns their home, around $50,000 per year. Your personal needs will likely differ, and this should be treated as nothing more than a guide! A personalised retirement cash flow projection can help answer:

• How long will your money last?

• Will you be able to cover healthcare, aged care, and inflation in the future?

• Could you maintain your lifestyle if markets are volatile?

Step 4: Reduce Debt Before Retiring

Carrying a mortgage, credit card, or personal loan into retirement can put unnecessary pressure on your income. If possible, aiming to pay off (or at least reduce) debt before you finish working may provide additional flexibility in your retirement years.

Some strategies may include:

• Using surplus income in your 50s to accelerate repayments.

• Downsizing your home and contributing to super (up to $300,000 per person with the downsizer contribution rule).

• Refinancing while still employed, if needed, as access to credit is often harder post-retirement.

Step 5: Do Not Forget Insurance and Estate Planning

As you approach retirement, review:

• Life, Total and Permanent Disability, and Income Protection insurance – do you still need them, or should cover be reduced?

• Wills and estate plans – are they up to date and tax-effective?

• Beneficiaries on your super – a death benefit nomination may ensure your super goes to the right person tax-efficiently.

The Bottom Line

Deciding when to retire is about more than simply leaving work - it is about knowing your finances will support the lifestyle you want.

By planning ahead, reviewing your superannuation options, and making smart use of strategies like downsizer contributions or account-based pensions, you can enter retirement with peace of mind.

At Tayme Financial Group, we work with clients across Australia to help them map out their retirement, optimise their super, and avoid the common pitfalls that could cost thousands over time.

If you are ready to start planning your ideal retirement, we would love to help.

General Advice Warning! This information is general advice. We have not considered your objectives, personal or financial circumstances. You should consider the appropriateness of the advice for your circumstances before making any decision. You should obtain and consider the relevant Product Disclosure Statement and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.