Superannuation & Retirement Planning
Superannuation is one of the most tax-effective ways
of saving for retirement. By saving a portion of your
income today, you can ensure that you will have enough
money to live comfortably by retirement.
The question is, how will you make sure you have enough?
It's tempting to answer this question with another:
“How long is a piece of string?'.
Assure Financial Services will work with you to determine how
much super you'll need to enjoy a comfortable retirement.
Considerations we look at together will be:
||What you want from your retirement lifestyle;
||Your current and retirement budget;
||Your retirement income;
||How much is needed to ‘top up’ your
||Your desired retirement age; and
||Your life expectancy.
There are three key areas to think about:
1. Having enough savings to begin with;
2. Investing wisely to ensure good returns; and
3. Making your savings last as long as possible.
As a rough guide, people usually need at least 60%
of their current annual income for retirement. So if
you're earning $60,000 now, you'll need at least $36,000
as your retirement income.
Transition to Retirement (TTR)
With the ageing of the Australian population, the Australian
Government is keen to encourage older workers to remain
in the workforce. One avenue is the move towards more
flexibility to enable a balance between work and retirement
with the introduction of Transition to Retirement (TTR)
What is Transition to Retirement?
TTR income streams allow you to access your superannuation
while you are still working. You must meet a number
of conditions to be able to take advantage of a TTR
income stream, including:
||You must have reached your preservation age.
For people born before 1960, this will be age 55.
Preservation gradually increases after this date,
and for people born after 1 July 1964, your preservation
age is 60.
||Your TTR income stream will be non-commutable
until you reach age 65 or retire from the workforce.
This means you cannot access a lump sum from this
income stream while it is in TTR mode.
||Your income stream must pay you between 4% and
a maximum of 10% of the account balance as income
Unlocking your super while you're working …
TTR presents an opportunity for you to access your
super via a tax effective pre-retirement pension once
you reach your preservation age. Unlike normal rules
for accessing your super, if you're age 55 or over you
don't need to retire or change jobs to access your money.
You can receive income from the pension while salary
sacrificing to super until you decide to fully retire.
If you're aged 60 or over, this strategy may be even
more beneficial to you as your pension payments are
now tax-free - and you're still able to salary sacrifice.
How can you use a TTR income stream?
TTR income streams form part of a number of financial
planning strategies. Two of the more popular are:
||To maintain your income while reducing your working
A TTR income stream can be used to maintain your
cash flow (income) if you choose to reduce the number
of hours you work.
||To accelerate your super savings in the run up
If you plan to continue working, a TTR income stream
can boost your cash flow (income), which will allow
you to salary sacrifice a larger proportion of your
salary than you may otherwise be able to afford
to do. If you are able to utilise this strategy
after age 60, it becomes even more effective as
the income from your TTR income stream will be tax-free.
Life expectancy for Australian
males is 84 years and 88 for females. If you plan
to retire at 65, your retirement savings will need
to last you around 20 years if you're male and longer
if you're female.
The information contained within this website is of
a general nature only. Whilst every care have been taken
to ensure the accuracy of the material contained herein
at the time of publication neither the author or Licensee
will bear responsibility or liability for any action
taken by any person, persons or organisation on the
purported basis of information contained herein.
Without limiting the generality of the foregoing, no
person, persons or organisation should invest monies
or take action on reliance of the material contained
herein but instead should satisfy themselves independently
of the appropriateness of such action.