Diversifying Your Retirement Income: Building Resilience

Diversifying Your Retirement Income: Building Resilience

Imagine driving down a road on three different types of tyres, each designed for a different terrain.

That’s how Australia’s retirement system works: the Age Pension is your safety net, superannuation is your main engine, and voluntary savings are your steering wheel. Together they give you flexibility, stability and control.

The Age Pension is a means‑tested payment that exists to alleviate poverty. It’s not based on what you’ve earned; instead, it’s a safety net for those most in need.

For low‑ to middle‑income Australians, it’s the main source of income; for middle‑income earners, it supplements super and other savings.

Don’t assume you’ll qualify for the full rate. You must meet age, residency and means tests, and the rules can change. Plan as if the Age Pension will top up your income streams, not replace them.

Superannuation, by contrast, is your main engine.

Compulsory during your working years, super is largely self‑directed. Check your accounts, consolidate small balances and select investments that match your risk tolerance.

Catch‑up contributions or salary sacrifice can boost your nest egg, especially in the years before retirement. A transition‑to‑retirement (TTR) strategy lets you access some of your super while still working, either to reduce your work hours or save on tax. If you’re 60 or older, a TTR pension can top up income as you ease into retirement.

You can also use a TTR pension to continue growing your super while salary‑sacrificing extra contributions; contributions are taxed at 15 %, which is often lower than your marginal tax rate.

Voluntary savings provide the most flexibility.

This bucket can include managed funds, shares, exchange‑traded funds, investment property, annuities, or continuing to earn income via part‑time work or consulting. The key is diversification.

Moneysmart explains that diversification spreads your investments across different asset classes, shares, property, bonds and more, to lower your portfolio’s risk. Because different asset classes do well at different times, diversification helps you get more stable returns. If one sector or asset performs poorly, others can offset the fall.

You can diversify further by investing across various sectors, fund managers and product issuers. A diversified strategy balances growth and defensive assets so your retirement income remains resilient regardless of market conditions.

When crafting your income plan, think about the lifestyle you want.

Will you travel often? Help your grandchildren? Downsize or stay in your family home? Consider your longevity, will your money last 25 or 30 years?

Plan for unexpected expenses and build flexibility into your strategy.

At Face Up Life we specialise in blending the three pillars, Age Pension, superannuation and voluntary savings, into a cohesive, adaptable plan.

We help you navigate eligibility rules, maximise your super and design diversified investments that match your goals.

Book your free strategy session today to build a retirement income plan that’s resilient, tax‑efficient and tailored to you.

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