Here’s a six-step checklist to support your financial health throughout your retirement years.

Step 1: Review your income sources

A steady income is crucial to maintaining financial stability in retirement. 

It’s important to regularly review your income sources to ensure they meet your lifestyle needs and explore options to maximise them.

If your income feels tight, consider speaking with a financial adviser to discuss alternatives, such as adjusting investment allocations, withdrawing super strategically or exploring ways to improve your current financial situation, even without additional income sources.

Step 2: Make a budget using the 50/30/20 rule

Creating a retirement budget ensures your money covers both essential and enjoyable aspects of life. The 50/30/20 rule is a simple way to divide your money:

• 50% for essential expenses, like housing, utilities, and healthcare
• 30% for lifestyle choices, such as travel, hobbies, or treating family
• 20% for savings and low-risk investments to create a safety net for unexpected expenses as well as preserve your capital 

Regularly reviewing your budget helps keep expenses under control so you can enjoy your retirement years with minimal financial stress.

Step 3: Consider downsizing 

Moving to a smaller home often reduces maintenance costs and utility bills. It can also free up home equity, providing a lump sum that can be invested in low-risk options like annuities, term deposits, or bonds.

The benefits of downsizing go beyond finances. Many retirees find that a smaller home simplifies life and reduces upkeep. When considering downsizing, think about factors like location, accessibility, and proximity to family or healthcare facilities. 

Step 4: Build an emergency fund

Unexpected expenses can arise, such as medical costs, car repairs, or home maintenance. Having a dedicated emergency fund provides a safety net and peace of mind. 

Aim for three to six months' worth of essential living expenses in a savings account. This approach allows you to handle surprises without disrupting your primary retirement income or investment strategy.

Step 5: Track your assets and liabilities

Knowing your net worth is a powerful tool in retirement. It shows the overall health of your finances by comparing assets, like property, super, and savings, with any outstanding debts. Reviewing your net worth periodically also allows you to adjust spending or reallocate assets as needed. 

Many retirees choose to move a portion of their wealth into low-risk assets, such as cash investments or bonds, to avoid market volatility. This strategy not only protects your capital but can also offer a modest income, helping you stay financially secure. 

Step 6: Create or update your will

An up-to-date will is essential to ensure your assets are distributed according to your wishes. A well-prepared will helps minimise family disputes and administrative hassles during a difficult time. Estate planning may also include setting up power of attorney and healthcare directives, so your family can make decisions on your behalf if needed.

Consider working with a lawyer to review your estate plan, especially if there have been recent changes to your assets or family situation. Clear and precise instructions help protect your loved ones and preserve your legacy.