It may be fast approaching or still a way off, but it’s always the right time to start thinking about the future you deserve. Whatever your situation, it’s important to think about what you want in retirement – so you can confidently enter the next stage of your life.
The basics of retirement
Retirement is a milestone marking the start of a new phase in your life. If you’re well-prepared, you can look forward to freedom from a set routine and the opportunity to enjoy many things you haven’t had time for while working.
Your level of financial security and quality of life post-retirement relies on having a sufficient retirement income. Making informed decisions about investing your superannuation and other savings can therefore be crucial. Whether you plan to retire entirely or gradually reduce your working hours, there are several factors you need to consider before you take any steps.
As you approach retirement, obtaining information and guidance is important for evaluating your circumstances, defining your retirement objectives, and establishing a viable and realistic strategy.
Superannuation presents a significant benefit for those who wish to take advantage of current tax treatment. For instance, with the transition to retirement legislation, individuals who reach preservation age can access a portion of their super funds via a ‘transition to a retirement income stream’ while still working full-time or reducing their working hours – and this may mean you pay less tax.
When planning your retirement, some things to consider include the following:
- When you want to, or are likely to, retire.
- Whether you want to retire completely or scale down to part-time work.
- How much super you have
- How much income you will need
- How long will your money last based on your life expectancy
- What do you want to achieve in retirement?
A regular income
When you retire, knowing you have a regular, reliable income is important.
An account-based pension (our retirement pension) is the most popular and tax-effective way to arrange a regular income stream. This is because:
- If you’re 60 or over, lump sum or pension income payments are completely tax-free*
- If you’re over 55 and under 60, you will receive a 15% tax offset on pension income payments received as part of a transition to retirement strategy*
- Earnings in the fund are tax-free.*
Control and flexibility
By opting for an account-based pension, you have the flexibility to decide on the amount of regular income you wish to receive as long as you withdraw at least the annual minimum amount (which is legislated by the government and based on your account balance and age). While lump-sum withdrawals are possible, additional contributions cannot be made to your pension once it’s established.
Getting your affairs in order
A comprehensive retirement plan should include a review of your will and how you’d like your estate to be distributed after your death. The right advice from a solicitor can avoid many common pitfalls that occur in family or business situations.
It’s also important to seek advice on the tax implications of how your estate will be distributed to ensure your beneficiaries receive all that you would like them to.
Expert advice on your retirement
Vision Super financial planners can help you plan your retirement and make decisions based on your needs.
You can request an appointment with a Vision Super financial planner who can provide information and advice about your super or pension. Bookings can also be made by calling 1300 300 820.
Depending on the nature and extent of the advice provided to you, fees may apply – but a Vision Super financial planner always discuss this with you before starting work.
*Applies to taxed funds only.