By being more strategic it is possible for Australian citizens to make the most of their assets to enjoy a fulfilling retirement. There is no exact magic amount of money to indicate how much all of us need to safely retire. The important thing is that you understand the sort of retirement lifestyle you hope to enjoy and determine how much annual income you might need to fund this goal.

An effective strategy that could give you a clearer understanding of what your desired retirement income is would be to write up a retirement budget. It can show how much income you will need but also let you fine-tune your ideal lifestyle if it looks like you may need to scale back your plans.

In most cases it is only when we are approaching retirement that the reality of the financial side of things becomes completely clear. Unless you plan to rely solely on the age pension (which only provides for a very basic lifestyle), it may be worth looking at ways to boost your retirement savings in your final working years.

Here are some tips to help make it easier for you to live the best retirement possible.

Explore Your Super Contributions

You might be able to increase your pre-tax super contributions. You may like to talk to your employer about making contributions via salary sacrifice. This is where part of your pre-tax wage or salary is directed to super instead of being paid directly to you.

Or you might be able to make a contribution out of your own pocket. Super savings are only taxed at 15%, but be aware of the contribution caps.

Consider your spouse’s super

If you have a partner or a spouse, it may be worth making a contribution to his or her fund. Be aware, annual limits on super contributions do apply. 

Explore your super investment strategy

It would also be a great idea to review your super fund to check that your nominated investment strategy is in line with your tolerance for risk.

Many pre-retirees are tempted to shift their super into low risk, conservative options, it is important to keep in mind that you could have 20 or even 30 years of living ahead. It could pay to have at least part of your retirement savings, including super, invested in growth assets that could generate long term capital gains.

Explore a transition to retirement pension

It would also be wise to consider using part of your super to purchase a transition to retirement pension. When combined with salary sacrifice super contributions, these pensions may help you increase your super while making up the balance of your take home pay with an income stream from your fund.

Other Things to Consider

Pay off the mortgage or grow super?

If you still have money owing on your home loan, you may be wondering whether it is better to use any spare cash to pay down this debt or add the money to your super. Everyone’s situation is different and the suggested advice would vary on a case by case scenario.

What about a self-managed super fund?

A self-managed super fund (SMSF) can have a number of advantages, allowing individuals to have complete control over how your super is invested (within Tax Office guidelines).

Managing your own retirement savings is a significant responsibility – and one that comes with costs of its own.

In addition to determining if you have sufficient capital for a SMSF to be worthwhile, consider whether you really want the added responsibility.

Investments outside of super

On top of your superannuation, it is a great idea to grow your investments outside of super. This may give you a diversified pool of funds to draw on as well as providing some protection against any unexpected legislative changes to super.

Downsizing the family home

Downsizing to a smaller property could offer the benefit of a lower maintenance home, an opportunity to be closer to family and a way to access any potential home equity.

It is worth crunching the numbers to be sure downsizing puts you in front financially. The upfront purchase costs, notably stamp duty, on your new home can take a bite out of your available cash.

There may be other options worth looking at, such as a reverse mortgage, which allows you to harness any home equity you may have without the need to sell a much-loved family home.