Retirement15 December 2017

Planning how to spend your retirement savings is just as important as saving


One of the greatest fears of many of us is that we won’t have enough money for a comfortable retirement. But far from money running out in retirement, research from the CSIRO has suggested that the majority of retirees are being so conservative with their spending that they’re dying with very healthy super balances1. Why would this be happening? Are retirees taking their good money habits to the extreme – living too frugally when they could be living the enjoyable retirement they worked so hard for?

This could be one factor: to be able to claim a tax exemption on super earnings, retirees must withdraw a minimum amount of their super each year as a pension; currently 5% for those aged 65- 74, rising incrementally to 14% for those aged 95 or more.

The CSIRO believes that decisions about spending and saving for the future can be so difficult that retirees are selecting the minimum pension payment as a very conservative option. Some are even dying with more in their super accounts than when they retired because their accounts are growing faster than they can spend it. So while the minimum pension amount may well suit some retirees, it’s clearly not necessarily appropriate for all.

Having sufficient retirement savings is one thing, but the CSIRO suggests there is a genuine need for people to really think about and plan how they’ll spend their retirement savings, not just withdraw the minimum pension amount and live within it.

It seems we’re getting the message to save as much as we can, but equally important are decisions about what we’re going to do with the savings in the future.

Planning retirement spending doesn’t have to be daunting

For those of us who don’t know where to start, thorough and robust financial advice and support can be a real benefit. But even then, we each need to be educated enough to seek the right adviser, ask the right questions, and be satisfied we’re getting the best possible advice for our personal situation.


1 Source: Based on data from the Australian Taxation Office (ATO) and super funds, 2004.

This article contains information or advice that is intended to be general in nature and which was prepared without taking into account your personal objectives, financial situation or needs. Because of that, before acting on any information or advice in this article, please consider whether it is appropriate to your personal circumstances, talk to a financial planner and consider the relevant member guide, available at or by calling 1800 005 166, before making a decision about whether to acquire the products.

Quadrant First Pty Ltd (ABN 78 102 167 877, AFS Licence No. 284443) is a wholly owned subsidiary of Tasplan Pty Ltd and operates as a separate legal entity.

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