I don’t know exactly how, but somewhere along the way, Australians have been led to believe there is a magical number we need to follow when it comes to retirement: $1 million.  Have it and you’ll be sorted. Don’t have it and you better keep working. 

My problem with this isn’t that $1 million is too much or too little, but that picking an arbitrary number is the epitome of one size fits all thinking.  As a financial planner, I regularly sit with clients in their 50s and 60s who believe they are unable to retire because they haven’t hit that magical number yet. I have worked with clients who thought they needed to continue working until they were 70 or 75 before they could finally retire. But when we did the planning, looking at how much they spend, their mortgage balance, their super, other potential income sources, and what they actually want from life, we found that, in some cases, they could retire within 12 months. 

Retirement planning is not a number, it’s a strategy. And financial freedom in retirement is not about being rich. It’s about having choice.  So, let me offer a new retirement lens: plan, prepare, and adapt. 

1. Plan: Start With the Life you want to live, not a number

For most of our lives, we are conditioned to work and accumulate. We save, buy a family home, try to get a better job with a higher salary, pay down the mortgage and grow our investments and super the best we can. But as retirement approaches, the focus should shift from “how much do I need?” to “what sort of life do I want to live in retirement?” I’ve met people of similar ages, incomes, and circumstances, where one needs $55,000 per annum to be comfortable and the other needs $100,000. 

So, the starting point should be to ask:

  • Do you want to travel in retirement?
  • Will you stay in the current home?
  • Do you need to help the kids financially?
  • Will you work part-time?
  • Will you be bored if you fully retire? 
  • How might your health affect retirement? 

In other words, start with the life you want to live, and work your way back to today. 

2. Prepare: Design the pieces to work together 

Once you know what you’re planning for, the next step is to prepare for how the different parts of your financial life fit together.  How will your mortgage, savings, super, family home, investments, and potential inheritance and Age Pension all work as a team to support your lifestyle? Your 50s and early 60s can be some of your most valuable financial years because you still have time to deliberately shape your retirement. This might include reducing your mortgage, making additional super contributions, reviewing investment risk, and reconsidering your insurance needs.  And your home should also form part of the preparation. Will the home need renovations? Could you eventually downsize? How might your home decisions affect your Age Pension entitlements?  Preparation is answering these questions before you are ready to retire, rather than reaching retirement age and asking: can I afford to retire?

3. Adapt: Know that retirement won’t go exactly to plan 

This might sound contradictory, but you should know that just because you have planned and prepared, not everything will go smoothly.  Like most things in life, retirement doesn’t happen in a straight line. Your spending will change over time, unexpected health issues arise, new hobbies emerge, and markets rise and fall.  Market downturns can significantly affect you when you are drawing income from your investments in retirement. The danger is being forced to sell investments while the markets are down. This is why having a proactive approach to your investment structure is so important. This means considering an appropriate mix of cash, growth, and defensive asset buckets. How much should you set aside for difficult years? How much should you invest for long-term growth? How can you adjust your income drawdown as markets rise or fall? You can’t predict everything, but you can position yourself to adapt.

Financial Freedom in Retirement is About Strategy 

So, do you need $1 million to retire? Maybe. Maybe not. Financial freedom in retirement isn’t measured by how much you have, but by the choices your money allows you to have.  Instead of being focused on an arbitrary number, let us approach retirement through the strategic lens of planning, preparing, and adapting. Will you still feel a bit uncomfortable at times? You bet. Will it feel like a monumental change? Of course. But the right strategy gives you the clarity to plan for what really matters to you. Because retirement is a life you build, not a number you chase. 

Amir Rodnia, author of Freedom Gameplan: Build Wealth. Live Free. Reclaim Time, is a financial planner, entrepreneur and founder of Rodnia Wealth Partners, who helps Australians plan for retirement with clarity and confidence. He holds a Master of Financial Planning and specialist credentials in retirement planning (CRPC®), self-managed super (SSA®), and behavioural finance (ABFP®). He is also completing a PhD researching financial literacy and business survival. His book gives Australians a practical roadmap for building smart assets and reclaiming control over their time. For free tools and resources to help build your wealth strategy, visit www.rodnia.com.au

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