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Navigating the next stage of life in retirement

Whenever I make a speech to retirees, I always begin with one of the most basic questions people need to think about. It’s almost inevitable that at some point you – or your partner, if you’re in a couple – will need care. Is your home one where that care can be provided? That became very real for me two years ago when I broke my ankle and discovered it was impossible to live in our present home without making some modifications.

That line of thinking leads straight to the next big question. Do you expect to live in your current home for the rest of your life, perhaps with some changes along the way, or do you plan to move? And if you do move, where to?

Moving to an exotic location may sound like paradise, but I recommend renting first in the area of your choice, ideally for 12 months, but at least for six months. It gives you time to experience the environment and, just as importantly, to see what sort of social network you are realistically likely to build. It’s a simple step that can save you from making a very expensive mistake.

If you move, will your next home be an apartment, a smaller house or townhouse, or some form of retirement village accommodation? For most people, I think the most appropriate option is a retirement village. There’s a wealth of research showing that a happy and healthy retirement depends on a good diet, regular exercise, a sense of purpose, and a strong social network. A good retirement village can provide all of those.

I always tell audiences about Harry and Margaret, who retired to the Sunshine Coast. Harry kept himself busy doing casual work as a handyman, while Margaret played golf. Life was very good. But after a few years it all became a bit too much, so they moved into a retirement village in the Sunshine Coast hinterland.

Harry loved it – especially the daily happy hour, where he would sit with Margaret and five widows from the village, enjoying good conversation and a few glasses of wine. They called it Harry’s harem.

Time passed, and then life took an unexpected turn. Harry died, fairly suddenly.

But here’s the important part. If they’d been living in an apartment where they knew hardly anyone, Margaret’s world would have shrunk overnight. Instead, her life in the village carried on. The same people were there, the same routines, the same support – exactly when she needed it most.

That’s the real value of a social network, and it’s something many people underestimate the value of when they’re planning for retirement. There’s plenty more to say about retirement villages – the good, the bad and the expensive – but that’s a conversation for another column.

The next big issue for anyone planning retirement and the home for this phase of life is how to fund it. Ideally, you want to retire mortgage-free. If you’re still working, you should be using every option available to boost your super, so there’s at least enough money there to deal with any mortgage debt when you retire.

I’m often asked whether people should focus on paying off the mortgage or boosting their super.

Making tax-deductible contributions is usually a no-brainer, because they come from pre-tax dollars, whereas mortgage repayments are made from after-tax income. On top of that, a good super fund should be earning a higher return than the interest you’re paying on your mortgage. And remember, if you have sufficient super, you don’t necessarily need to eliminate the debt as soon as you retire – you can draw enough from super to pay the interest while the remaining super balance continues to compound.

The other critical factor is time. If you’re 60, earning $100,000 a year and have $500,000 in super, that’s all you’ll have when you retire – and you’ll still be seven years short of qualifying for the age pension. Working for five more years could lift your super balance to around $800,000. There are also strategies such as transition-to-retirement pensions, which allow you to access part of your super once you turn 60 while continuing to work, often on reduced hours.

The key point is this: the more you get into your super, and the longer you can delay drawing on it, the more you’ll have when you eventually need it.

Where you live and how you pay for it are two of the biggest issues facing any retiree. Do yourself a favour and think about the things that you, like almost everybody else, are likely to face.

 

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: [email protected].

 

  •   11 March 2026
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16 Comments
Rod in Oz
March 12, 2026

Good on you Dudley; always appreciate your maths and pithy comments :)
Perhaps not always correct, but always amusing!

4
Dudley
March 12, 2026


"not always correct": Keeps readers awake?

2
Phil
March 15, 2026

Thanks Noel, your advice is spot on. We looked to downsize from a house to an apartment for 5 years, but I never wanted to move twice so last October we moved to a retirement village which has all levels of care. Whatever transpires we will never be apart. Kids said we were mad - "too young in mid-seventies" - but they're all on board now and we're really enjoying the social options included.

2
Dudley
March 12, 2026


"The key point is this: the more you get into your super, and the longer you can delay drawing on it, the more you’ll have when you eventually need it.":

Unless end up in the "SourestSpot";
. Too much capital for any Age Pension, or,
. Too little capital to return more than single full Age Pension.
= (26 * 1178.7) / ((1 + 5%) / (1 + 3%) - 1)
= $1,578,279.30

1
DJC
March 12, 2026

@Dudley
Thank you. Am I correct in the assumption that the $1.578M is for a couple?

1
Dudley
March 12, 2026


"1178.7" / f = single.

Couple:
= (26 * 1,777) / ((1 + 5%) / (1 + 3%) - 1)
= $2,379,403

5
Wildcat
March 15, 2026

But you can have more fun in the Sourestspot, spend money, big holidays etc and then when you run down your capital you get the pension.

You win twice.

Despite the poorly designed system more money = more choice, less money = less choice.

I’d be taking the sourestspot even if I couldn’t make it across to the other side.

3
Dudley
March 15, 2026


Common to want to spend capital on 'delayed gratification' while a spritely retiree:
= PMT(((1 + 5%) / (1 + 3%) - 1), 15, -2379403, 481500)
= $156,412 / y

An alternative is to conserve capital by converting Age Pension Assessable Assets to non-Assessable Assets = the home, either improvements or pay down a mort-gage on home.

Maximal real income occurs with Age Pension and full Age Pension Assessable Assets threshold:
= (26 * 1777) + ((1 + 5%) / (1 + 3%) - 1) * 481500
= $55,552 / y
Add real home capital growth:
= ((1 + 6%) / (1 + 3%) - 1) * (2379403 - 481500)
= $55,279 / y

Dudley
March 16, 2026


Age Pension + no earnings on no Assessable Assets
= (26 * 1777) + PMT(((1 + 5%) / (1 + 3%) - 1), 30, 0, 0)
= $46,202 / y [StewSpot]

full + earnings on full threshold Assets
= (26 * 1777) + PMT(((1 + 5%) / (1 + 3%) - 1), 30, -481500, 481500)
= $55,552 / y [SweetSpot]

no Age Pension + earnings on part cutoff Assets
= (26 * 0) + PMT(((1 + 5%) / (1 + 3%) - 1), 30, -1074000, 1074000)
= $20,854 / y [SourestSpot]

no Age Pension + earnings on sufficient capita to earn same as full Age Pension
= (26 * 0) + PMT(((1 + 5%) / (1 + 3%) - 1), 30, -2379403, 2379403)
= $46,202 / y [SourSobSpot]

no Age Pension + earnings on sufficient capita to initially earn same as full Age Pension + capital drawdown to part Age Pension Assessable Assets cutoff
= (26 * 0) + PMT(((1 + 5%) / (1 + 3%) - 1), 30, -2379403, 1074000)
= $78,675 / y [SanctuarySpot - enough left for decent post-retirement and mortuary care]

JanH
March 15, 2026

Dudley: If you have too much capital to receive Age Pension you are in a sweet spot, not sour. What annoys me is how financial advice, as in the AFR, help people shuffle their assets, so as to be eligible for at least a Part Pension. This is disgraceful. And comes at other taxpayers' cost. The Age Pension should be for people who really need it. Self-funded retirement should be the goal for everyone else and provides the greatest freedom. Who wants to have anything to do with CentreLink if they don't have to?

8
James#
March 15, 2026

"The Age Pension should be for people who really need it."

Somewhat subjective. Do people that don't bother to save, invest or add more than the minimum to super "deserve" to get a pension? Do people earning up to $500 k as a couple "need" universal (taxpayer funded) childcare? What about the non means tested NDIS (the mother of all rorts)? Plenty of disgraceful things going on unfortunately!

6
Dudley
March 15, 2026


"If you have too much capital to receive Age Pension you are in a sweet spot, not sour":
SourSpot for income. SourSpot for Capital withdrawals to substitute for income.

"What annoys me is how financial advice, as in the AFR, help people shuffle their assets, so as to be eligible for at least a Part Pension.":
Government is so well aware that they create shuffling incentives that it can only be their intention that taxpayers comply with the shuffle 'directive'.

"The Age Pension should be for people who really need it.":
Government could eliminate shuffling incentives by paying Age Pension to all age and citizenship eligible, including those who pay / paid for those who do / did not.

"Who wants to have anything to do with CentreLink if they don't have to?":
No need if paid to all eligible.

4
Jim F
April 28, 2026

It's a laughable issue that a lot of aged pension recipients are low income and asset rich (mostly in their multi million family home).
Any side of the commonwealth governments should really look into this to issue.
My layman suggestions are:-
Family home receives 2 x median home price of the tespective locality, or city, or state. Any excess will be treated as asset and subject to deeming for income purposes. Centrelink aged pension recipients would worry about their reduced handouts. This can be made up by reversed mortgages of the multi million dollars home.
The roll on effect of this arrangement will most likely be pensioners downsizing to smaller home in line with median priced homes. Hence more housing stocks will be available in the established areas to fully utilize the existing infrastructures.

Dudley
April 28, 2026


"housing stocks will be available":

More likely with abolition of the Mean Tests which provide a strong incentive to convert Age Pension Assessable Assets to non-Assessable Assets (= home improvement).

James#
April 28, 2026

"It's a laughable issue that a lot of aged pension recipients are low income and asset rich (mostly in their multi million family home)."

Alternative reality for many: Many probably don't find it advantageous. The house they bought 30-50 years ago was a home. Not their fault government policies (high immigration, insufficient supply) have pushed up prices to ridiculous levels. Where they live is familiar with maybe caring neighbours. Now some poor widow in her 80's - 90's should either have to negotiate with real estate sharks and move or deal with reverse mortgage sharks and then suddenly learn how to invest the rest to replace the pension lost. Easy peasy!

More grist for the mill! Great to see you're on board with Jim and Albo's magical illusionary, deceitful intergenerational inequity bus, aka steal from the older middle class (not the truly uber wealthy Mc Harbourside mansion set) and squander it on more socialist handouts, green "cheap" energy boondoggles, public servants, unions and free childcare for couples on $500 k pa! Bit of a spending problem anyone?

1
 

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