As it stands, the pension age in Australia is 66 years and six months. As of July 2023, that is set to rise to 67. The most recent data from the Australian Bureau of Statistics shows that the average person intends to retire slightly before then, at 65 and a half. Meanwhile, the average retirement age among all retirees was 55.4 years.
And there are certainly plenty of advantages to retiring early. It frees you from the set routine of the traditional working week, and affords you the opportunity to do the things you truly love. That could be travelling, pursuing your hobby or simply spending more time with your friends and family.
But being in a position to give up working is not an easy thing to achieve. So, here are a few tips to help you along the way.
Start saving early
Retiring early means you are fortunate enough that your financial status affords you the chance to do so. If it’s something you aspire to, it’s important that you start planning well in advance. It could prove a sensible move to set up a separate fund which you pay into each month and gradually build over the years.
Take up a side hustle
If you’re not blessed with lots of expendable income, you could supplement that with a money-making scheme on the side. For example, if you boast impressive artistic or photography skills, you could build up your portfolio and start selling your pieces. Alternatively, if you have a head for numbers and you understand the currency markets, you could set up an account as a forex trader. Bear in mind, however, that trading does present a risk and you could stand to lose money as well as make a profit.
Supplement your pension
While you’re still in employment, you could increase your contributions to your workplace pension. It’s usually something your HR department can help you with, and in most cases the money is automatically deducted from your salary, so you don’t have to worry about spending it elsewhere or forgetting to do it.
Downsize your home
This is a great way to release some of the equity that’s tied up in your property. If you’d be just as happy living in a smaller place, you could take the decision to downsize and purchase somewhere less expensive. And because you’ll have more capital to put down as a deposit for the new house, you’ll need a smaller mortgage. That in turn will leave you with more leftover funds to enjoy in your retirement.