The beginning of a new financial year is more than an administrative checkpoint; it’s a prime opportunity to reflect on your retirement planning. Regardless of whether you’re just starting your savings or approaching retirement age, taking the time to review your financial strategy ensures you remain aligned with your goals, adjust for life changes, and prepare for the future.
This guide will help you assess four key aspects of your retirement plan—superannuation contributions, investment strategies, budgeting for retirement, and estate planning. With careful evaluation, you can take actionable steps to safeguard and grow your wealth as you move closer to financial independence.
Why Regular Reviews Are Essential
Retirement planning isn’t a one-off task—it’s a long-term commitment requiring regular adjustments. Life changes, market fluctuations, and legislative shifts can all influence your financial outlook. Setting a mid-year review habit, especially at the start of Australia’s financial year, allows you to take advantage of opportunities like refreshed superannuation caps or new government policies.
An annual retirement review ensures that your strategies remain relevant and that you’re on track to achieve a secure, fulfilling retirement.
- Assess Your Superannuation Contributions: Superannuation is a critical pillar of retirement savings in Australia and offers some of the most tax-efficient ways to grow your wealth. Reviewing your contributions at the start of the financial year ensures you’re taking full advantage of the available caps and opportunities.
- Revisit Your Current Super Balance: Check your current superannuation balance and how it aligns with your retirement goals.
- Maximise Your Contributions
- Concessional Contributions: The FY25 concessional contributions cap remains at $30,000 per year, covering employer contributions, salary sacrifice, and voluntary pre-tax contributions. These contributions benefit from a flat 15% tax rate; however, an additional 15% is taxed if income is $250,000 or above.
- Non-Concessional Contributions: For those looking to boost their super balance, the annual non-concessional contributions cap is set at $120,000. Younger Australians or those with moderate super balances can look into the bring-forward rule, which allows up to $360,000 in contributions over three years.
- Check and Update Beneficiary Nominations: Reviewing your beneficiary nominations yearly ensures they reflect your current intentions. Unclear or outdated nominations can lead to lengthy disputes and unintended consequences. Ensure any existing nominations are valid and, if applicable, that they’re binding to guarantee your wishes are honoured.
Fine-Tune Your Investment Strategy
Investments are a crucial driver of long-term wealth creation. The start of FY25 is an excellent opportunity to review your portfolio and make any necessary adjustments to align with your retirement timeline and risk tolerance.
- Revisit Asset Allocation: Your portfolio’s asset allocation—how much you hold in shares, bonds, property, and cash—should align with your retirement horizon and financial goals. Younger individuals may benefit from growth-oriented assets such as equities, while those approaching retirement should consider reallocating toward more stable, income-focused investments.
- Monitor Investment Performance and Fees: High fees can erode your returns, particularly over the long term. Review the fees associated with your managed funds or exchange-traded funds (ETFs), and assess whether they align with the value they deliver. Equally important is ensuring your investments are meeting performance benchmarks.
- Consider Emerging Investment Options: The financial landscape is constantly evolving, and new investment opportunities such as geared funds, ethical ETFs, or high-yield real estate options may suit your objectives. Ensure any new investments align with your broader strategy and risk profile.
Plan and Budget for Retirement
Building a robust retirement budget is essential for ensuring your income can support both necessary and discretionary expenses.
- Estimate Your Long-Term Costs: Retirement costs vary depending on lifestyle preferences. Factor in essential expenses like housing, healthcare, and utilities, alongside discretionary items like travel, hobbies, and entertainment.
- Adjust for Large Upcoming Expenses: Are you planning to renovate, relocate, or fund a family event? Budgeting for these one-off expenses ensures they don’t derail your broader financial plan.
- Build a Safety Net: An emergency fund is non-negotiable, even in retirement. Aim for at least six months’ worth of living expenses to cover unexpected costs like medical emergencies or major home repairs.
Revisit Estate Planning
Estate planning is a vital, yet often overlooked, component of retirement planning. Taking the time to review these elements ensures your assets will be passed on according to your wishes.
- Update Your Will: A will should be reviewed at least annually, especially if you’ve experienced significant life changes such as marriage, divorce, or the birth of a new child. Clear instructions in your will reduce the risk of disputes among beneficiaries.
- Review Powers of Attorney and Guardianship: Appointing enduring powers of attorney ensures trusted individuals can make legal and financial decisions on your behalf if you lose capacity. Confirm these representatives remain suitable and informed about your preferences.
- Align Super Beneficiary Nominations with Your Estate Plan: Because superannuation often falls outside the control of your will, it’s essential to ensure your beneficiary nominations in your super fund align with the rest of your estate plan. Seek professional advice to avoid inconsistencies.
Take Action—Start FY25 Right
The start of the financial year is your annual opportunity to reset and refocus on your retirement goals. By reviewing your super contributions, fine-tuning your investment strategy, creating a realistic retirement budget, and updating your estate plan, you’ll ensure you’re on track for a worry-free retirement.
Planning today will provide clarity, security, and peace of mind for the future. Make FY25 the year you set the foundation for a financially successful retirement.
If you would like to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.