Managing your money in retirement

You’ve been dreaming of retirement for years. But how do you manage your spending when you’re no longer working?

Regardless of your savings, retirement will signal big changes in your financial life. Your priorities will likely change as you move from saving mode to spending your hard-earned savings.

Heading into retirement can be an anxious time. Knowing how much money you'll need and if you'll have enough to live comfortably can be hard. No one wants to worry about paying bills - retirement should be a time to embrace a new phase of your life. So, how should you spend your money?

According to UniSuper financial adviser, Melinda Brown, “Underspending in retirement is common. It’s hard to strike a balance between living a relaxed retirement, and ensuring your money lasts as long as you do.”

"Many retirees worry they'll outlive their savings. As a result, they can be more conservative in their spending and live more frugally than necessary - sometimes at the cost of a comfortable retirement. A spending plan will give you the best chance to achieve financial security and the lifestyle you'd like to lead."

Here are some tips for planning your spending in retirement.

Develop a spending plan

It doesn't matter if you're feeling anxious or comfortable about your finances; you need to consider what you'll spend your money on as you settle into retirement. A budget will help you track your spending, stay on top of bills, and work out how to afford the things you want.

Melinda's tip is to "Think about Maslow's Hierarchy of Needs – but categorise your financial needs into stages. In the hierarchy, basic needs are seen as the most important. So, ensure your basics are covered (housing, food, utilities), and identify how much you have left after that – that will allow you to make good choices based on what you can afford."

MoneySmart has some useful resources to help you set up and use a budget. You can also use our budget planner or our retirement savings calculator to estimate how much super you’ll have when you retire. If you’re close to retiring, our retirement income calculator can help you understand the income you could receive and how long it could last.

Update and tweak your plan regularly

Expenses change over time; therefore, so will your spending plan. You may spend more money while you’re looking to tick off your ‘bucket list’ items, and less in your later years when you won’t have as many discretionary expenses. Take the time to revise your plan and check it’s still working for you.

Melinda says, “Getting your annual super statement is a great reminder to revisit your spending plan. This gives guidance on what you might be able to afford in retirement.”

Understand your appetite for risk

How you invest your money (including your super) should align with your personal approach to investing. For example, your risk appetite can influence how you invest your money - and how you react to headlines in the news.

As a rule of thumb, retirees are generally more conservative with their investments – with an emphasis on preserving their savings rather than growing them. But does that strategy work for everyone? Now that we're living longer, we could spend up to 30 years in retirement, so growing your money in retirement to help make it last the distance could mean a different approach to risk. If you understand how much risk it takes to achieve your goals, is there a reason to take on more risk than that?

When investment markets do well, we know that people spend more, but conversely, when interest rates and cost of living pressures increase, spending habits decrease.

According to Melinda, "Investing in a way that's best for you provides more certainty and can help to smooth out this ride. Everyone is going to have a different approach and appetite for risk. You might think - why take on more risk than you need to achieve your goals? "

"It's important to take steps towards financial security in retirement, but also remember to enjoy your retirement years and not let financial worries overshadow this time in your life."

A financial adviser can help you better understand your needs, but we have a retirement income calculator to demonstrate the impact that different investment options and risk profiles can have on your income in retirement.

You can also access range of tools to help you understand your individual risk profile. Learn more about investment risk.


We all hope to live healthy lives, but unexpected issues and illness can arise. Healthcare costs can be a significant expense in retirement – especially when you no longer have an income, so it's important to allow for these costs. Even with health insurance, you will likely have out-of-pocket costs, so remember to factor these expenses into your budget.

One of the best ways to manage healthcare costs is to stay healthy. This means maintaining a healthy lifestyle, getting regular check-ups, and following your doctor's recommendations for preventive care.

Melinda says, "We know that well-being in retirement is not just about money. Equally important is your physical and emotional health. A retirement plan is a chance to bring these elements together.

Need help?

It’s not uncommon to feel anxious about retirement, so rest assured help is available. A qualified adviser can provide guidance on something as simple as budgeting, or how you should be invested, right through to a complete retirement plan. Contact UniSuper Advice.

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How much will you spend in retirement?
There’s no one set figure that works for everyone and whatever retirement looks like for you, money is a key factor.
Growing your super for retirement
It’s never too soon to think about your retirement. The more you can save for your retirement now, the more choices you’ll have in the future.
The information is of a general nature and doesn't consider your personal circumstances. Before making decisions, you should consider whether the information is appropriate for your circumstances otherwise seek financial advice.
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