Navigating career changes before retirement

It’s not uncommon for people approaching retirement to consider a career change. Whether it’s moving to a less stressful job, pursuing a passion project, working fewer hours or switching to part-time work, these changes have the potential to impact your super savings. 

While reducing your hours or changing jobs may sound appealing, a reduction in your income will likely mean your employer’s superannuation contributions are reduced too. Another reality to consider is that your health circumstances may change as you get older, possibly limiting your ability to continue working in your chosen profession. 

If you plan to reduce your working hours or switch to a lower-paying job, here are just a few things you might want to consider, to help keep your super plans on track. 

1.    Increase your contributions: If your new job offers a lower salary, you might consider whether you want to – and can afford to – make additional voluntary contributions to top up your decreased employer contributions.
2.    Review your super fund: Check that your super is working as hard as it should be for your retirement goals. Are you making the most of the options that might be available to you? Are you comfortable with your investment choices and the fees you are paying? And is any automatic insurance cover still meeting your needs? Or would you be better off keeping that money in your super? 
3.    Budget and save: Consider whether you need to adjust your budget to accommodate changes in your income. A few sacrifices here and there could help you save so you have more to invest in your super.
4.    Review your retirement plans: Consider whether your retirement plans could be impacted by your change of employment or reduced income. You might need to reassess your planned retirement age or even your lifestyle expectations for retirement.