What you can do to manage your retirement income when inflation is high
1. Revisit your retirement budget
According to the 2022 AMP Financial Wellness Report, 45% of retirees follow a budget to help them stay on top of their costs and manage their retirement income4. Knowing how much you spend in retirement and where your money is going can help you feel more confident about making good spending choices. You can enjoy more peace of mind when you’ve run the numbers and know you’ve got a buffer to cover expenses and maintain your lifestyle as the cost of living rises.
If you’re not used to budgeting, our video gives you tips on working out your spending in retirement.
2. Invest to manage inflation risk
Before you retire, your super is invested so you can maximise the savings you’ll have to live on when you’re not earning an income anymore. Once you’ve left work and exited from SASS^ you’ll need to find a way to invest your savings to keep them growing. Getting a better investment return in retirement can help your savings last and offer you the potential of more income for longer. Our research shows that about a third of retirement income from a pension account is generated through the investment returns from retirement savings.
When inflation is high, it’s even more important for retirement savings to benefit from the long-term growth that investing can provide, so that your retirement income is able to keep meeting your lifestyle goals. If you work with a financial adviser to manage your investments in retirement, it’s important to check-in with them regularly to look at your income needs and to stay on track for your plan.
Find out more about what rising inflation means for investments and retirement strategies
^ Before you exit SASS, it's important to check if you have a defined benefit pension option as a feature of your account
3. Look at ways to boost your income
If the rising cost of living has you concerned about having enough to spend throughout retirement, there are a few things to look at to supplement your income from your SASS benefit:
- Other assets and investments – you may have other investments outside of super – such as a share portfolio or a managed fund – you can rely on for income in retirement. You may have cash savings that you want to invest. If you downsize your home, you can potentially access further funds.
- Centrelink benefits – 60% of Australians over the age of 65 get extra income from the Age Pension5.
- Part-time work – part-time work can be a good way to top up your income, particularly in the early stages of retirement, and help your savings last longer.
Find out more about starting a side hustle to earn some extra income in retirement.