You’ve turned 50? Let that be your trigger to review and act
I turned 50 at the beginning of this year, and that was the trigger I needed to get serious about my own retirement plan.
As the author of two bestselling books on retirement, I know exactly what to do. But there’s something very different about actually sitting down and doing it on your own, with your partner by your side, setting real targets for your super and other assets, working out both how much you can contribute and how quickly you can do it, and working out what compounding investment actually does over a 10 to 15 year period.
Goals are not just to grow your money, but to use it one day. It really made something I teach every day more exciting. Because what we’re working on isn’t just a target number.
This is a number we understand, and it gives us the choice: after age 60, if life goes as we planned, the choice to work because we want to, not because we have to.
When I got to this stage one thing became obvious to me. The options available to us now, in our early to mid-fifties, are remarkable. But most won’t be there at 65. Some will be weaker. Some will disappear completely. This is the main reason why you should take your pension and savings seriously now rather than later.
Let’s see how we can make a big difference:
If you want to be serious about this, let that be your trigger.
Redeem your capture concession contributions
Most people know they can contribute up to $30,000 a year; This contribution will increase to $32,500 on July 1, 2026 and will convert into a retirement fund with a preferential tax rate of 15 percent.
What far fewer people realize is that if your superannuation balance was under $500,000 at the end of the last financial year, you can go back up to five years and use any unused deduction limits you’ve accumulated. These are called catch-up concessional contributions, and they allow you to contribute large, tax-effective amounts into your pension in a single year.
This is a very powerful strategy in your fifties; usually when your earnings are at their peak, your tax bill is at its highest, and the pressure to fund children’s education is finally gone.
But the window is finite. If you wait too long, you’ll either exceed the $500,000 threshold or you won’t have years left to use it.
At age 50, putting after-tax money into a retirement fund isn’t just about filling up your balance. It is a deliberate strategy to move your money into the lowest tax environment where you can use it as quickly as possible so that compounding can work best while you sleep.
Within super, investment gains are only taxed at 15 per cent when accumulating. For most people in their peak earnings years, this is a tiny fraction of what they pay into investments outside of super. And when you retire, that tax rate drops to zero on balances up to the $2.1 million transfer balance cap starting July 1.
Take Sarah. He is 50 years old and his mother recently died and he inherited $360,000. On the advice of his financial planner, he uses the bring-forward rule to put the entire amount into his retirement fund at once as a non-concessional contribution.
There is no tax on your income since you have already paid it. That $360,000 then sits in super and grows at an average return of about 7 percent per year for 15 years until you retire at age 65. By then that amount had risen to just under $993,000. He contributed $360,000 and compounding did the rest.
Her friend Karen receives a similar inheritance at age 63 and makes the same move. But Karen only has seven years left until she retires at age 70. That same $360,000 turns out to be about $578,000 with the same 7 percent return.
Still a great result. But the difference between Sarah’s ending and Karen’s ending is more than $415,000, and neither did anything different. It just depended on when they made their move and the time they spent in the market.
Take time to remodel your structure
This is what surprised me the most when I sat down to work on our plan. At 50, you still have time to reimagine where your money sits and how it compounds from there.
You can gradually transfer assets from outside retirement to a tax-advantaged environment within retirement. You can unwind old managed funds that aren’t doing much there and reallocate those funds into higher-performing, lower-fee investments.
If your risk profile allows, you can position your super more aggressively for growth, knowing that you have a real 10 to 15-year runway before you need to capitalize on it.
By age 65, you’re largely managing what you’ve already built, or grappling with how to make enough of what you’ve neglected to combine with old-age retirement. The levers to reshape the structure have mostly disappeared.
Understand age retirement
A big question worth asking yourself honestly at 50 is: Are you likely to be on the verge of qualifying for an old-age pension?
If you think you can get to the middle ground where a surprisingly large number of Australians end up, then it’s certainly worth considering understanding how the system works now and making sensible decisions throughout your fifties and sixties so you don’t accidentally work against yourself later on.
Consider if and when to downsize
If you are 55 or over and selling a home you have owned for at least 10 years, you can contribute up to $300,000 per person or $600,000 per couple directly to the retirement fund as part of the downsizing contribution.
This does not count towards your usual contribution limits and there is no tax on entry. At 50, you’re not there yet, but you’re close enough to think about it consciously.
This may mean thinking carefully about when you might want to sell, how you’ll adjust the timing to convert the money into retirement funds, and how those proceeds will fit into your broader strategy.
Downsizing at age 65 is often triggered by necessity, health, cash flow, or a home that has become too much to manage. At age 55 or just after, gearing down and adding funds to a retirement fund sooner can be a deliberate and powerful wealth-building move that can also be coupled with a lower tax rate.
Consider phasing out retirement
This is a huge thing in real life and something I’m planning for myself. At age 50, you can begin to imagine your transition to retirement as a gradual, deliberate process rather than a sudden halt.
Maybe this looks like a transition from full-time job to consulting, then portfolio career, then part-time, then casual work. Each step down reduces your dependence on your retirement while also giving it time to grow.
You can also use a switch to a retirement income stream, which allows you to earn a modest income from your pension while you work; You can smooth your income by reducing your working hours without wasting your savings or compromising your lifestyle.
For many people at age 65, the decision becomes binary. Work or stop. And that’s a much harder and less pleasant way to make one of the biggest transitions of your life.
Working gradually on our own plan this year has given me more courage to keep trying and reminded me that the best time to take action is when you still have options. You have more options in your early to mid-50s than most people realize, and more than you’ll have at 65.
But some of these choices will disappear over the years and no one will send you an alert; One day they will disappear quietly. So if you want to be serious about this, let that be your trigger.
Bec Wilson is the bestselling author How to Have an Epic Retirement and new releases Prime Time: 27 Lessons for the New Middle Life. Writes a weekly newsletter epicretirement.net and hosts prime time podcast.
- The advice given in this article is general in nature and is not intended to influence readers’ decisions about investments or financial products. They should always seek their own professional advice, taking into account their personal circumstances, before making any financial decisions.
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Bec Wilson is the author of How to Have an Epic Retirement and writes a weekly newsletter for pre- and post-retirees at epicretirement.net.
