Super strategies – 10 years out from retirement

When you’re approaching retirement age, there will be a few decisions to make. Among them is the decision of where to invest extra cash – should you maximise contributions to your super fund, or should you focus on reducing your debt, such as paying your mortgage?

Time to get serious

If you’re focusing on maximising your super balance through additional contributions, there are several tax deductible strategies, including salary sacrificing (the concessional contribution cap is now $30k). Over 10 years you could build up your balance through contributions plus compounding.

However, the decision to focus on your super shouldn’t be made lightly. 

Although there are limited circumstances that allow you to withdraw it, it’s important to have ready access to some cash as a buffer.

How to play the future game 

Chris Smith CFP®, VISIS Private Wealth founding partner, says he likes to count backwards from age 60 (when you can access your super) and look at what financial milestones people need to reach before then. 

“We tend to make sure you’ve got enough working capital outside of super to replace your income if you don’t have insurance all the way through to touching your super,” Smith says.

“We then start to line up your assets, possibly buying additional assets now to bridge the deficit.”

He says if you’re going to move house, it’s important to consider whether you need to upgrade or downgrade your home to free up spending capital. 

“Then decide when you will sell your assets. When are you going to have low taxable income? What are you going to do with the proceeds?

“Five years before retirement and three years after is probably the key period, but if you don’t start 10 years out, you’re really increasing the risk of not getting there. 

“It’s not that you stop work at 60 and everything’s got to be paid off and sold.  It could be a three-year transition period to worry about a complete end state balance sheet.” 

The change of life

Andrew Dunbar CFP®, director from Apt Wealth Partners says one of the biggest challenges about retirement is that it’s one of the biggest times of change in your life, and you’re going to go from having an income arriving on a regular basis to drawing down on your own resources to live.

“It’s a huge mindset shift for people. And it’s as much an emotional mindset shift as it is a financial shift. The thing that helps make that transition easy is having a plan in place when the time comes. That really starts with thinking about your life as more than money. 

“This is a great time to really start asking yourself those big life questions. What are my values? What do I want to get out of my retirement years? How do I want to be remembered? What are the feelings that I want to prioritise?

“Some people might want to prioritise a feeling of safety and security and other people want to prioritise adventure and experiences.”

Dunbar says understanding what will make you happy is key, and the earlier you start planning the better it is – but most people start thinking about this slope on the day they hand in their resignation. “That’s not ideal.”

The role of super 

Super is the last free lunch we’ve got in Australia and in retirement, no matter what your situation is, maximising superannuation is generally going to be a fantastic option because whatever you earn in retirement is going to be tax free, and whatever you draw down in retirement is going to be tax free. 

Dunbar says people should be considering adding to concessional contributions, (which are tax deductible), including the catch-up contributions. This is particularly relevant for people who’ve had time out of the workforce where they might get an opportunity now to use those last few years to try and catch up.

A strategy for couples is splitting your contributions with your spouse. Benefits might occur through the ability to access more aged pension or access the pension at different times depending on the ages of each spouse.

There’s also the government co-contribution and the spouse contribution. The spouse contribution provides a tax offset to the person making the contribution. The government co-contribution provides a matching amount up to $500 to help low or middle come earners boost their super.

Story Wealth Management CEO Anne Graham CFP® says it’s also important to check your asset allocation. Are you in the right option for this time? she says. 

“Maybe you can afford to take more risk if you are 10 years from retirement.” 

“You also need to pay attention to fees and check your balance every three to six months to ensure that your contributions have been received by your fund. Just because it says your superannuation contribution has been made on your payslip, doesn’t mean it has been sent off to your fund.”

More information on these strategies can be found at the Australian Tax Office website 

The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA.  The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article.  Nor does it endorse or assume responsibility for the information accessible via any links provided in the article. Please consider seeking advice from a qualified professional to ascertain how the information in this article and the links provided may relate to you.


Julia Newbould is a freelance writer and speaker. She was recently managing editor at Conexus Financial curating content for events for superannuation chief investment officers, and financial advisers and licensees. Prior to that she was managing editor of Money magazine. In 2020 she published her first book The Joy of Money, co-authored with financial adviser Kate McCallum. The Joy of Money won the Best Personal Finance and Investment book at the Australian Business Book Awards in 2020. It was also a runner up in the Health and Wellbeing category. Julia has more than 20 years’ finance journalism experience and was previously editor of Financial Planning and Super Review magazines at Reed Business Information; managing editor at InvestorInfo and managing editor at Morningstar Australia. Her passions lay between helping women gain greater equality in all areas of life and supporting financial literacy in all areas of society.
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