Ask Paul: How can I start planning for retirement?


Dear Paul,

I'm going to be 50 next year. As a present, I'm going to ask for some retirement planning financial advice.

I  feel closer to retirement than to when I started work and feel now would be a good time to get specific advice to give me time to implement any recommendations. 

ask paul clitheroe how can i start planning for my retirement

My wife and I have some funds, superannuation, and an investment property, some of which are overseas from periods working outside of Australia, so advice that takes into account Australian tax rules will be important.

Over the years, I've collected Money's articles on financial advice, but I know this area is changing rapidly. How would you advise me to go about seeking advice right now? - Martin

Well, Martin, as I write this, the adult kids and grandkids have just left our place. They popped over for brunch for my 67th birthday. The point here is that at my age and being semi-retired is not the time to be doing critical retirement planning.

Sure, we need to review our plans in line with changing legislation, but age 50 is a terrific time to be getting serious about retirement plans.

I'm not sure retirement is a good word anymore. I reckon the key goal is financial independence. We all need a plan for that, then you can work for fun, not necessity, or not work.

First up, while you sound organised, let's make sure you have a clear summary of assets, liabilities and income. Then we go to your current budget and look at what surplus income you have now. It's pretty easy to run a basic model to see what assets you are likely to have in, say, five, 10 or 15 years.

Next, you need to know what level of income you will need in retirement. Once you map that out, then you can see where you are.

Personally, I use about a 4% return on assets. I am also happy to run down investment assets for our life expectancy. This is an important issue. If you want to leave everything you have today, plus inflation, to the kids, you can really only spend 4% of your investment asset base each year.

This means $1 million is only likely to give you $40,000 a year, but you have vastly more to spend if you use capital and income from that $1 million. Then we get into all sorts of complexities, such as a part age pension as assets run down.

My view is to start with your tax adviser, especially as you have offshore assets. I'd talk to your tax people about their links to professional financial advice; they are likely to have trusted advisers they can refer you to.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Money magazine
August 10, 2022 9.06am


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Andrew B
August 10, 2022 1.06pm

Make sure you get paid advice not a free financial advisor. I went to a free advisor and the advice was terrible. He recommended a heap of products that he would get commissions from and I would be paying for.

David Go
August 10, 2022 10.15pm

So do some that charge fees thou, it's extremely difficult to find a trusted competent financial planner

Sam p
August 12, 2022 2.16pm

I tried free financial advice and it was terrible. Just been down the path of paid advice it wasn't much better. If we were to follow their advice there aren't any commissions, but it wasn't a great ad for getting paid advice. I'll put it down to experience and I'll probably (reluncantly?) go down that path again some day, but for now I'll manage my own investments.

Paul Eardley
August 11, 2022 6.35am

Hi World, Look Paul seems a great guy. Its about time that paul gave some depth to his answers including contact sites to go to for info. Anybody could answer like he does.

Ta Paul.