This report is sponsored by Aware Super. It was independently researched and written.

A handy guide to retirement to help you plan a smooth transition into your golden years.

Decades of raising a family, paying off a mortgage and climbing the career ladder can pass in the blink of an eye.

All too soon we find ourselves looking down the barrel of retirement, and it can bring real uncertainties about what lies ahead. Planning ahead is key.

This timeline to retirement will help fill the knowledge gaps to get you on the right track.

10 years from retirement

There's no set date when we have to retire. According to the Australian Bureau of Statistics women retire, on average, at age 63. Men stay at the coalface slightly longer, typically retiring closer to age 67.

That makes our 50s a key time to lay foundations.

Steve Travis, group executive, member growth at Aware Super, says, "Many people aren't engaged with their super until they hit what we call the 'Oh crap!' moment.

This tends to happen between 55-65 years when retirement is in the not-too-distant future."

Paul Wratten, financial adviser with Statewide Advice, says our 50s are often the time when we start asking 'Will I have enough?', 'Can I retire sooner?' and 'How can I improve my chance of a great retirement?'

While there are no one-size-fits-all answers, your super fund should have a range of resources to help you start planning.

Aware Super, for example, has an online tool, My Retirement Planner. It takes a member's balance today and estimates their likely income in retirement. For some members this can provide reassurance they're on the right track. For others it may be a wake-up call. Either way, these tools can remove a lot of the guesswork around retirement savings.

1. Consider how much super you'll need

Not sure how much super you should aim for? Travis says, "First, understand what you're spending now and the lifestyle you want in retirement. Factors like whether you still have a mortgage, your eligibility to receive the age pension and how long you're likely to live for all play into how much you'll need."

As Travis notes, "We are living longer, healthier lives than in the past. The retirement phase of your life could be 30 years or more." He believes this longevity is "an amazing opportunity 
to reimagine the way you want your life to be".

2. Give your super a boost

Making tax-deductible contributions from your own pocket or organising salary-sacrificed contributions can boost your super in the run-up to retirement.

Wratten adds that selecting a fund with low fees and reviewing your choice of investment options can also accelerate your balance. "Understand the risk versus return trade-off," says Wratten.

"The more risk you can accommodate, the higher the returns you should expect."

3. Check your fund's investment performance

According to Travis, investment returns on super "make up to as much as 50% of your balance at retirement".

He says a fund that consistently delivers 0.75% above average in annual investment returns can lead to an extra $22,000 over 15 years*.

"So it's important you check how your superannuation is invested and how well it performs against other funds," says Travis.

Five years from retirement

By our late 50s - and definitely early 60s - retirement is starting to look real.

1. Review your super investment options 

Travis says, "As you approach retirement, you may want to reduce exposure to riskier assets to protect your savings from market downturns.

Conservative or balanced options can offer more stability although, depending on your circumstances, it might still be important to maintain some level of growth exposure."

2. Using your super to ease into retirement

It's possible to ease your way into retirement by dialling down working hours. Investing part of your super in a transition-to-retirement (TTR) account can help fill the income gap. Travis says the minimum drawdown from a TTR is 4% of the balance annually, rising to a maximum of 10%.

"The 10% maximum drawdown limit provides some protection against excessive withdrawals," says Travis.

While TTR drawdowns are tax-free for members aged 60 and over, investment returns will still be taxed at 15% (same as the accumulation phase), and capital gains on assets held longer than 12 months are taxed at 10%.

12 months from retirement

No matter when you plan to retire, turning 65 is a major milestone. Travis says, "Reaching age 65 removes all restrictions on super access. You can withdraw some or all of your super completely tax-free, regardless of whether or not you've retired."

This makes it important to weigh up what you'll do with your super.

1. Why it's worth leaving super in super 

It can be tempting to pull money out of super on retirement, however Wratten points to compelling reasons to keep your nest egg in the broader super environment:

• Personal tax Investments outside of super will be subject to your personal tax rate. The tax benefits of super can stretch your retirement savings further.
• Contribution caps Once you meet a condition of release, taking money out of super is relatively easy. Getting it back in is subject to a range of caps that can limit your ability to reverse course.
• Estate planning Funds in super can be passed to certain family members or dependants as a 'non-estate' asset, meaning it is not subject to the terms of your will (and therefore not subject to any challenges to your estate). 

As an added plus, a number of super funds such as Aware Super, pay a retirement bonus when you move your accumulated super into one of the fund's retirement income options.

2. Map out a retirement budget

"Planning for, and understanding, your day-to-day living costs in retirement is important," says Travis.

Think through how your expenses might change.

Some costs may decrease while others, such as healthcare, could increase.

3. Build your knowledge bank

The more you know, the more you can plan ahead. Travis says the best first place to go for information is your super fund.

Along with online tools and general advice at no extra cost, larger funds offer webinars and even in-person seminars. If you need more comprehensive advice, your fund can usually help with this too.

Six months from retirement

Happy days lie ahead! There is still a critical step to work through - turning your super savings into a retirement income stream.

1. Prepare to switch from accumulation to drawdown

Your super can be transferred to a retirement income account when you reach age 60 and are retired, or if you are 65 or older, with no work test required.

Travis suggests reaching out to your super fund 4-8 weeks before retirement to discuss your options.

2. Decide how to use your super

In general your super can be used to invest in two main options within the super environment.

"Account based or 'allocated' pensions are the favoured options for most retirees in my experience," says Wratten.

"There is a wide range of investments and you can access your capital at short notice with most funds."

Payments from allocated pensions are tax-free from age 60.

You can make small cash withdrawals at any time and set your preferred regular payments (minimum 4%-5% of your balance yearly, based on age) while your money stays invested and keeps growing.

If you're concerned about outliving your money, a lifetime annuity provides guaranteed income for a set period, even for life.

Your super fund can explain the choices available, and the pros and cons of each.

3. Apply for the age pension

Before reaching for the champagne to celebrate your retirement, make a diary note to apply for the age pension 13 weeks before turning 67. Getting in early means your pension can be ready to go by your 67th birthday.

Research by Aware Super shows that one in three (31%) people who applies for the age pension waits for 12 months or more after turning 67 (pension-eligibility age) to submit their application.

This can mean missing out on $18,000 in age pension payments.

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