Retirement planning covers how much superannuation is enough, planning for retirement, starting an income stream, claiming the Age Pension, making contributions while receiving a pension from a super fund, estate planning and looking after your family.
What are your plans for work? – How long you can or wish to work is up to you. The longer you work the less you will need to draw on your savings and the more you can accumulate to fund your retirement.
How much do you need to retire?
As a rough guide, depending on your investment strategy, you would need at least 12 times the amount of your required annual income to ensure you can maintain that income for the rest of your life. That is, if you wanted an after-tax income of $50,000 for the rest of your life you would need around $600,000.
Boosting super in the lead up to retirement
Superannuation’s tax concessions on contributions and earnings, and the ability to draw tax free income from the age of 60, mean it is the ideal way for most people to fund their retirement.
Anyone under age 65 can contribute to super and people aged between 65 and 74 can contribute as long as they have worked at least 40 hours in a 30 day period during a financial year
When is the best time to retire?
There is no legislated retirement age. However, you can only access your preserved super from age 55 if you were born before 1 July 1960, increasing in yearly increments to age 60 for those born on or after 1 July 1964. The government pension is currently accessible from age 65 for men and 64 for women, but this will gradually increase to age 67 for both sexes for people born in 1957 or later.
There are broadly two ways to approach planning for retirement. You can decide when you wish to retire and work out how you will fund it from your accumulated assets, or work out how much you will need to retire on and plan your retirement around that target.
To seek advice about your retirement plan speak to your financial adviser or contact us