Retirement looks different
Retirement will look different to everyone but with careful planning you can take control.
Planning for retirement
Most of us have different ideas about when we’d like to stop work (or at least - when we’d like to work a little less!). And inevitably we all have different thoughts about what we’d like to do once we reach retirement. But the steps in between can be overwhelming. What do you need to do to start to make your dreams a reality? Do you have enough money? And who - really - is around to help you
work out what to do?
• Retirement looks different now than it did for your parents or for your grandparents.
• Retirement looks different when you seek advice - you have options, you can live a more confident, secure and certain retirement.
• Retirement looks different with financial planning advice from one of Australia’s most referrable financial planners*.
* 84% of our clients said they would refer their adviser to a family or friend. We think that makes Financial Services Partners one of Australia’s most referrable financial planning groups. Survey conducted with over 1,000 clients between July and August 2009
Key questions to determine what retirement means to you?
What do you want to do when you stop work?
When it comes to your retirement, what do you worry about most?
When can you access your Super?
How can you maximise your age pension entitlement from Centrelink?
How can you retire tax effectively?
How does your retirement look - setting retirement goals
One of the first things we do when a client comes to talk to us about their retirement options is sit down with them and find out what retirement means to them. A question we always ask is “what do you want to do when you stop work?”
Some common answers are:
• I want to travel more - locally or overseas
• I’m going to spend more time with my family
• I’ll spend more time (and money) on my hobbies
• I’ll become involved with a community group
• I don’t want to stop work altogether
• I’m going to sleep in, read the paper and enjoy not going to work!
• I’m not sure but I want enough money to live on.
Another question we always ask is, “when it comes to your retirement, what do you worry about most?
We get answers like this:
• I don’t want to run out of money
• Can I get the pension?
• I want my partner to have enough to live on when I’m gone
• How do I manage when the sharemarket looks shaky?
• We really want our children to benefit from our money (or alternatively, we want to spend every last cent!). It’s important to recognise retirement as a time of great change. And while the thought of staying in bed on a cold winter’s morning may be appealing, managing the many lifestyle changes is something you shouldn’t underestimate. Retirement will look different to everyone but with careful planning you can take control by seeking advice. A good place to start is to have a think about the questions we’ve asked above. What would your answers be? Often, it’s not until potential clients spend time with us that they start having this kind of conversation.
Once we understand your retirement goals we can talk to you about other important questions such as:
• How much will you need?
• When can you access your Super?
• How can you maximise your age pension entitlement from Centrelink?
• How can you retire tax effectively?
How much will you need?
Our adviser will spend time with you working out what your financial resources are: what assets do you have that can be used to generate an income for you; could you benefit from government assistance, and how can you make sure your income is tax effective?
Superannuation is designed to provide savings for your retirement. For most of us it will be a major source of income. Of course, the amount you’ve managed to save in super, along with other factors like your age, eligibility for a government pension, and how much risk you are comfortable taking with your money, will determine how much income you decide to take from super.
Often we find that your super won’t give you enough to live on. If this is the case for you, your adviser will work with you to suggest strategies to help you boost your super before you retire, and to make the most of it once you do. There are many smart ways to increase your super and other assets, and it always pays to understand your options. But the starting point is always you and your individual goals. Speaking to us is an essential part of answering this question; the answer is different for each of us.
The facts The Association of Superannuation Funds of Australia (ASFA) has put together a guide which shows how much you will
need for a comfortable standard of living and the types of things you may need to spend your money on. They have estimated that to live comfortably retired singles will need:
• $40,034 p.a. for a male
• $42,201 p.a. for a female
• $57,847 p.a. for a couple.
When can you access your super?
The retirement choices available to Australians have changed a lot in the last few years. In the past, most of us permanently retired from the workforce before accessing our super (if we had any super at all). Currently, the government has in place options to help you transition to retirement. In other words, to wind down gradually - perhaps by working part time, and accessing some super at the same time. This strategy may be available to you if you have reached your superannuation preservation age:
The rules allowing you to take a lump sum from your super are a bit different, and require you to:
• Reach your preservation age and retire (note you may still be able to work less than 10 hours a week), or
• Change jobs at age 60, or
• Reach age 65, or
• Become totally and permanently disabled, or
• Be a temporary resident and permanently depart Australia (excluding New Zealand).
Again, there are many options - you’ll need to talk through your situation with your adviser.
Financial advice for a brighter future We tailor solutions and strategies to help you grow your wealth faster, manage
it better and safeguard it more effectively. We aim to deliver you a great experience each and every time we meet to discuss your personal financial situation.
Accessing your Centrelink entitlements
The Centrelink age pension often forms a crucial part of the retirement income of retirees. Generally, an individual isn’t entitled to a pension until he or she meets age based eligibility criteria (although there is a range of pensions and benefits available in different circumstances). Age pension entitlements start from age 65 for both men and women. Your adviser will assist you to structure your investments to maximise any Centrelink entitlements.
how superannuation is taxed in retirement. These changes are especially important to understand as you approach retirement, as they affect the decisions you make about how best to generate your income. Seeking professional advice is crucial, as the rules may seem complex – but structuring your investments in the right way will make a real difference to the financial outcomes you enjoy.
We’re here to help you grow your wealth faster, manage it better and safeguard it more effectively to build you a brighter future.
This means that when you visit us we will take the time to understand your situation, your goals, and your concerns. We’ll ask questions such as:
• Where are you now?
• Where do you want to be?
We’ll help you to understand your choices.
This means we’ll explore issues such as:
• Your personal situation
• Your concerns and attitude to risk
• Your changing needs as you grow older. And we’ll tie it all together in a financial plan that helps you understand:
• What your retirements options are
• Our recommendations on how to realise your retirement goals
• How to make the most of your options and future opportunities
• The next steps. FSP-RLD/12-14/V1
In Australia, Life Insurance and TPD Insurance is typically included in your super – by default. Generally this is a
good thing, but if you’re one of the 4 in every 10 Australians who have more than one super fund, it may not be a
good thing at all.
Why? Because, unless you’ve opted out of insurance with your other funds, you’re essentially duplicating your cover
AND your premiums. As you can see below, this can have a massive negative impact on your retirement savings.
Unfortunately, this is not always easily fixed by simply consolidating your super into one fund. You need you need to
be sure that you’re making a good choice. And that can be more complicated than most people think. For example,
what if you choose to consolidate with a more recent fund and then you’re no longer covered for a pre-existing
condition? Here are three other aspects to consider as well:
There’s simply too much at stake to take the DIY option or just assume you’re properly covered by default
insurance in super. The smart thing to do is get professional advice and make sure you, and the people who
depend on you, are properly covered – by an insurer with a track record for swift payment of claims.
*Source: Choice, https://www.choice.com.au/money/insurance/life/articles/lack-of-clear-information-costing-consumers-on-life-insurance-091216
Supersolve Financial Services is a Corporate Authorised Representative of Financial Services Partners Pty Ltd ABN 15 089 512 587 AFSL 237590. The information (including taxation) provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.