The aim of the Donald Bradman Retirement Strategy is simple: to ensure you'll never run out of money.

However, to do that we're going to turn traditional retirement planning on its head. And we're also going to flip the bird at financial planners who say ‘you need $1 million to retire'.

I'm going to show you how my Donald Bradman Retirement Strategy took a 65-year-old couple, with $200 000 combined in super, and gave them a comfortable retirement … much better than most retirees achieve.

I doubt you've ever read anything quite like this.

Strap your pads on. Grab your bat. It's time to take a swing at the biggest fear people have.

Give us a hand, cobber

When I was a self-conscious teenager, my father imparted cruel and sadistic punishment by driving me around in a 20-year-old, rust-ridden clunker Hilux he'd owned since his 20s. Thankfully, my mother was not impressed with the ute. She put pot-plants in the tray and threatened to turn it into a garden ornament unless he got rid of it. He did.

Fast forward to a few months after my house burned down. I'm with my dad and we're driving through the paddocks . . . in my very own beaten-up 20-year old Hilux . . . surveying the burnt-out fences that would need to be replaced.

‘What do you think about my retirement?' he asked.

At that point it dawned on me that I'd been busy helping everyone else but hadn't really spoken to my own parents about their retirement. I felt like the dentist whose kids have crooked teeth. Or the plastic surgeon whose wife has droopy boobs. Thankfully, my parents are on track for a wonderful retirement — and so are you.

Fear and loathing

‘You need $1 million in retirement,' say most financial planners.

‘$2 million might not even be enough,' wrote a financial planner in the newspaper recently.

Stop!

If you're in your 50s these retirement figures will likely scare the bejeezus out of you. After all, the average Aussie couple retires with $200 000 in super.

You do not need a million dollars in super to retire

A million dollars is way above what you actually need. At a minimum, you need a paid-off home (see Step 7) plus:

Couples: $250 000 in super

Singles: $170 000 in super.

Make this your ‘retirement number'.

To be clear, this is the number you need to nail before you even think about retiring — and that's in addition to owning your own home outright.

(A note to future readers. If you're reading this in 2027, the amounts you need to save will be affected by inflation, but the same rules apply. It's a very achievable figure.)

Hang on, what if you don't have $250 000 before you retire?

You keep working.

Hang on, what if you have more than $250 000 saved up in super?

You keep smiling. Barefoot Rule 3445 states: ‘When it comes to your retirement, you will always be better off having more money in super. Always'.

Here's you: I think old Barefoot needs a pedicure! I mean, really, what sort of retirement will $250 000 get us? We don't want to dine out on dog food!

Here's me: If you follow my strategy to the letter, you're going to have a very comfortable retirement.

Here's you (crossing your arms): Your idea of retirement might be a little different from ours, young man.

Here's me: Okay, well let me paint you a picture of what a paid-off home and $250 000 (or $170 000 for singles) buys you in terms of lifestyle in retirement.

What your retirement will look like

• You enjoy a three-week trip to Noosa each year with your friends, staying in a nice hotel.
• You regularly eat out at nice restaurants, and you choose whatever you want on the menu.
• You enjoy a nice glass of wine (or two) as the sun sets each night.
• You own a near-new Toyota Corolla.
• You regularly buy nice new clothes.
• You continue going to the same hairdresser you always went to while you were working (they're an absolute magician at hiding the grey, and — let's be honest — they've got a bit more work to do these days).
• You keep track of the footy scores on your iPad … and download the occasional dirty movie.
• You enjoy fishing with the latest gear. Your wife goes to Pilates once a week, and you both go to art class and learn how to draw nudes.
• You buy your grandkids nice presents, without spoiling them. More importantly, you buy an annual zoo pass and take them out on day trips. Lots of snaps on the iPhone for the weekly battle of ‘my grandkids are cuter than yours' at the golf club.
• You've got enough dough to replace your drab kitchen and bathroom when you retire (you'll be spending a lot more time in the toilet, old boy … drip, drip, drip).
• You've got top-quality private health insurance so you can have your choice of doctor and hospital.
• You've got emergency money socked away so you don't have to worry about day-to-day bills — and you know your long-term income will never run out.

Again, just to be clear, that's what you can look forward to if you retire with a paid-off home and $250 000 (or $170 000 for singles), if you follow my Donald Bradman Retirement Strategy.

Sound good?

Well, you'll be pleased to know I haven't plucked any of this out of thin air.

What I've just described (minus the dirty movies) is what the stodgy Association of Superannuation Funds of Australia (ASFA) has calculated as being achievable for retirees living a ‘comfortable retirement'.

So how much dough does ASFA calculate that this comfortable retirement will cost?

$59 000 a year for couples.

$43 000 a year for singles.

Now there's a mountain of psychological research that suggests that once you earn over $40 000 a year it won't add to your happiness. But, hey, with the improvements in healthcare, you could spend more time in retirement than you did in the workforce — so why not be comfortable, right?

But it gets better.

With Don Bradman on your side, you'll never ever run out of money.

At this point you're thinking, ‘Does this plan of yours involve me holding up convenience stores with cricket bats? Because I can't see how my $250 000 will afford me a $59 000 per year lifestyle'.

Let's head to the crease.

Introducing the Donald Bradman Retirement Strategy

This strategy works for everyone, regardless of how much they have in super.

What we're focusing on is getting you to a comfortable retirement, which ASFA says costs:

$59 000 a year for couples or $43 000 for singles.

As I've said, if you can't explain your financial plan in 30 seconds — or sketch it on the back of a serviette — you really don't have a financial plan at all.

Thankfully, there are only three steps to achieving a comfortable retirement.

Rule 1: You must have the banker off your back

This strategy only works if you retire debt free … as in no mortgage (which is why we've already dealt with paying off your mortgage in Step 7).

Even better, the age pension doesn't take into account the value of your family home. (Which means that, theoretically, James Packer could cash in his chips when he's older, buy a $7 billion home and collect the age pension.)

You need to own your own home — debt free — before you retire.

Rule 2: Nail your number

You can't retire until you've nailed your retirement number as a minimum (more money is better): $250 000 in super for couples and $170 000 for singles.

Hang on, what's so special about these numbers?

This is the maximum dollar amount of assets (excluding your family home) that you can have and still get close to the maximum rate of age pension. At the time of writing, the maximum rate of age pension is $34 252.40 per year for couplesand $22 721.40 for singles. And it will get you 60 per cent of the way towards your comfortable retirement number on its own.

Think of this as your safety net: it's guaranteed by the government, it's indexed twice a year to keep up with inflation and it will be paid until the day you die.

In other words, if your assets are worth less than $250 000 or so — excluding your family home — that's the gift that pension-age retirees receive from the government by virtue of living in the greatest country on earth.

Hang on.

From experience, I know that last paragraph has probably made you spit out your Tetley's tea, especially if you're what's known as an ‘in-betweener' — someone who has slogged away and saved up enough money in super that you don't qualify for the pension, but not enough to be ‘rich'.

I have two answers for you:

First, you will always be ahead financially if you don't need to qualify for the age pension. That's the way the system's designed — as a safety net only.

Second, as someone who pays my fair share of taxes — something I'll continue to do for decades to come — the idea of ‘welfare' rubs me the wrong way. I'm certainly not planning on relying on the pension in my retirement. And anyone under the age of 50 who reads this book and puts in place the Barefoot Steps won't have to either.

However, I'm a financial advisor, not a politician, and my job is to help you and your family and friends live comfortably within the rules. In my opinion, the government will not get rid of the age pension (besides, comparatively, Australia spends less on its pension safety net than many other countries), though they will limit who can get it. As they bloody well should.

Let's take a look at the retirement scoreboard so far.

1. You've paid off your home.
2. You're getting the age pension of $34 252.40 (per couple) a year, indexed for life. And you've got $250 000 in super. (This will pay you a tax-free income of $12 500 a year, and I'll explain exactly how to invest it in the next few pages.)

So, you're now at $46 752 per year. Even better, this money is guaranteed to keep up with inflation, and it'll last until the day you call stumps.

We're closing in on our ‘comfortable' target of $59 000.

Let's keep going.

Rule 3: Never, ever retire

It's said that the two most dangerous years of your life are the year you're born and the year you retire.

Well, it looks like you made it through the first one, so let's talk about the second.

The golden rule of retirement is … keep working.

That doesn't mean you have to keep your existing job (especially if you're a tiler with dodgy knees).

You can do something less labour-intensive — just a day or so a week, and it doesn't need to be every week.

Work is good for you: retirees who continue doing some kind of part-time work are found to be the happiest and the least likely to suffer depression.

Why not use the skills you've honed over your career to do some useful work?

I meet so many Uber drivers who are well-to-do retirees who don't need the money — they just like chatting to people and earning their keep at the same time.

And better yet, if you do work, the government will bend over backwards to help you.

Once you reach pension age, you'll not only be able to draw a tax-free pension from your super, but in addition a couple can earn up to $28 974 each without paying a cent of income tax (singles can earn $32 279 per year).

Yet what if your advisor says, ‘You're a winner, you don't have to work another day in your life'.

Barefoot says, ‘Work anyway, even if it's a day a week'. The biggest mistake you'll make with your retirement is to give up working.

You'll never, ever, run out of money

Let's take a final look at the retirement scoreboard, after you've applied all three rules:

1. You've paid off your home.
2. You're getting the age pension of $34 252.40 (per couple) a year, indexed for life. And you've got $250 000 in super, paying $12 500 a year.
3. You and your partner each work just one day a week (and not every week — you'll be in Noosa, remember) to bring in a combined $20 000 a year, completely tax free.

   Age pension:             $34 252

   Super pension:         $12 500

   Work:                         $20 000

   Total:                       $66 752

That's almost $8000 more than you need for your comfortable retirement!

Ker-ching!

The three-bucket retirement solution

Now let's talk about how you should manage your buckets ... before you kick the bucket!

You understand how the buckets work while you're working, right?

Well when you retire, you're going to operate your buckets from within your superannuation.

Think of it this way: it's like you're a grey nomad who's been invited to Woodstock. When you get there, you pitch your tent. Then you like it so much, you stay there!

Now replace ‘Woodstock' with ‘superannuation' and you get the idea. And in this magical place there is no taxation, and you're pitching your ‘tax-free tent' here. (No joints, guitars or free love — but there's possibly a health care card, and tax-free income for life!)

You've been used to saving up some ‘safety money' in your Mojo account, but now you can do this inside super. You're picking up your Mojo and moving it into a similar savings account inside super. From now on, your Mojo Bucket is inside your Grow Bucket.

And you can manage your money inside your super fund exactly the same way you manage your money currently. The only difference is that you'll now … pay no freaking tax.

A quick recap:

Your Blow Bucket remains the same; that's still for everyday expenses (which you'll access with your everyday transaction account). And feeding this, in part, will be pension payments from your Grow Bucket.

Your Mojo Bucket, however, now sits inside your Grow Bucket. And what's more, it will go from having three months of living expenses to three years of living expenses.

Huh?

Sounds like a lot of money, right?

Yes, it is.

You're no longer working, so you need to be even safer. Here's the thing: knowing that you have three to five years of money socked away is going to stop you from having a lot of sleepless nights when the markets get rocky. That Mojo will buy you time to ride out the storm. It will give you a feeling of safety and security — and control.

Now if you're a Collingwood supporter, you're probably quite comfortable with losing, so you may only need three years of living expenses. If you're inclined to freak out and sell at the bottom of the market, shoot for having five years of pension payments.

Where will you get three years of pension payments for Mojo?

Easy peasy.

In the three years leading up to your retirement, you should direct your Fire Extinguisher into maxing out your pre-tax super contributions (your Grow Bucket, that is).

And here's the important part:

These three years of super contributions should be invested into ‘cash', not ‘shares'.

So, I want you to call your low-cost super fund and tell them that you want anything you contribute, in the three years before you retire, put into a cash account within super. Which we're going to call … drum roll please … your ‘Mojo'. (Same ‘safety money' it's always been, but now within super.)

There's another very smart reason to devote the last few years of your working life to boosting your Mojo. Could you imagine working your guts out in the three years before you retire, only to have the sharemarket crash the day you slap on the sandals and socks?

Remember, when you're retired you're effectively turning the tap to a dribble (but never completely off — you need to keep working — even if it's just to keep the old grey matter ticking over!), so you need to be conservative.

And the upside of having three years of pension payments in Mojo is that it allows the rest of your money to be put to work and earn a better return.

Your Grow Bucket is also where the remainder of your money should be invested. Specifically, it should be invested in good-quality, dividend-paying shares or share funds within your … again … ultra-low-cost super fund (see Step 1).

These shares will continue to earn dividends. And here's a final trick: I want you to automatically divert all dividends into your Mojo Bucket (which is now inside the Grow Bucket) so that your Mojo's being automatically replenished.

In retirement your biggest risk is that you'll outlive your savings. You need to stay ahead of the rising costs of living, and historically, the only reliable way to do that is by investing long-term in the sharemarket and getting these dividends.

Besides, you can't work forever.

And if you're lucky enough to find yourself under the lights of the MCG on a balmy summer's evening and you're 100 not out, that Mojo will provide an extra level of padding.

Now, go back to page 215 and read about your comfortable retirement again.

Go on … I'll wait.

There's no reason to be afraid.

You've got this.