Retirement is a major transition in both your lifestyle and your finances. Leaving the 9-5 (or 7-7 for the ambitious types among us) changes how you manage your wealth portfolio, shifting from the tried and true “save more than you spend” to “spend what you’ve saved”.
This requires more than a simple mindset change; the systems and strategies that guide your financial decisions will need reshaping to reflect your new lifestyle. A clear plan and reliable guidance take the stress and uncertainty out of transitioning even complex eight-figure portfolios, letting you enjoy the security and freedom of a well-managed, self-funded retirement.
Know your “enough” number
The best cure for retirement uncertainty is looking at concrete numbers. “Enough” doesn’t need to be an abstract concept, you can run the numbers today and find out exactly how much you should be saving.
Look through your current spending habits and consider how they might change after retirement. Factors like paying off a mortgage, moving to a different tax bracket, or retiring abroad can significantly change your fixed expenses. Estimate how much you will need to draw from your savings each year to maintain the lifestyle you want—whether that means a Portuguese country estate, moving closer to family, or taking some time to enjoy where you already are—and aim to build a portfolio that can sustain that withdrawal rate for 30 years.
Of course, it’s impossible to account for absolutely everything in your calculations; you can’t predict things like inflation, investment performance, or even exactly how many years you’ll need to draw on your savings. So, having a financial adviser in your corner can assist with projecting your portfolio’s long-term performance to help you make confident, informed decisions about your future.
Build a flexible foundation
A strong, reliable retirement plan provides certainty and security regardless of how the market performs. You don’t have to worry about where your money comes from, how it grows, or how much you can spend—your plan just works. Your advisers can help you test your model against various what-ifs and worse-case scenarios so you can feel confident in its ability to withstand any conditions.
Income layering is a good way to build a stable and tax-efficient retirement income system. You may not be working full-time anymore, but your money and experience will still be working for you through investment properties, dividends, and even occasional paid consulting work. Keeping a properly diversified portfolio (across multiple countries and industries) makes this supplementary income less vulnerable to shifts in technology, resources, or politics.
The rate at which you plan to draw from your portfolio should also be flexible and future-ready. The 4% rule (developed by former financial adviser William Bengen in 1994) is a popular guideline for retirees, recommending that you withdraw roughly 4% of your total portfolio balance in your first year of retirement, then withdraw that same amount (4% of the principal amount, not 4% of the remaining funds) adjusted for inflation the following year, and so on.
Static withdrawals are straightforward and easy to manage, but 30-year-old models can struggle to adapt to unpredictable or extreme market shifts. The guardrails approach, developed by Jonathan Guyton and professor William Klinger, is a more flexible, more hands-on alternative that dynamically adjusts your withdrawal amount based on changes in the market. You choose a target withdrawal rate, then set guardrails at 20% above and below that target (e.g. 6% and 4% guardrails for a 5% target rate), and adjust your total withdrawal amount up or down by 10% any time the inflation-adjusted target amount falls outside the guardrails. This gives you more freedom to move with the market and enjoy growth years, but may require.
Plan for a purpose
Retirement is a transition, not a conclusion. Your plan should be built around concrete goals for your retired lifestyle and empower you to spend your hard-earned money in meaningful ways. The earlier you start planning for retirement, the easier it will be to take advantage of different tax strategies and build strategic saving and spending habits. We recommend beginning at least five years before you plan to retire.
Your most valuable assets are your health and relationships, so make sure your plan doesn’t sacrifice either of these for the sake of maxing out your numbers. A dedicated retirement planner will make sure your strategy is tailored to you and supports your lifestyle beyond the spreadsheets (while also maximising the performance and security of your portfolio).
Make everything easier
Confidence doesn’t come from having an eight-figure portfolio; it comes from knowing where you’re going and how you’ll get there. The right plan can transform your retirement transition from a maze into a springboard.
Work with an expert who makes you feel like an expert (or levels you up to be one). Capital Partners is the only CEFEX-certified fiduciary in Western Australia, providing personalised financial services for successful Australians, turning complex portfolios into clear, actionable retirement plans. Our team can help you take the first steps towards retiring with confidence; book a call through our website or view our Knowledge Hub for more advice and insights.
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