Retirement Planning & Advice

The age in which you can access your super – your ‘preservation age’ depends on your year of birth. Anyone born after June 1964 can access their super at 60. If you are born prior, your access is earlier:

If you are between 55-60, you can ease into retirement under the Transition to Retirement strategy (see “What is Transition to Retirement, and is it worthwhile?” below.)

Your pension eligibility depends on your age, total asset value and income. Once you reach pension age, your superannuation is classed as an asset.

To receive a full pension, homeowners can have up to $401,500 in assets for couples and $268,000 for singles. Non-homeowners can have up to $616,000 in assets for couple and $ 482,500 for singles.

To receive a partial pension, homeowners can have up to $876,500 in assets for couples and $583,000 for singles. Non-homeowners can have up to $1,091,000 in assets for couple and $797,500 for singles.

The Association of Superannuation Funds of Australia (ASFA) estimates a superannuation balance of $640,000 is required for couples to live out a ‘comfortable’ retirement and $545,000 for singles. This is, assuming you withdrew your super as a lump sum and received a part Age Pension. This can be broken down to  $62,269 per year for couples or $44,146 per year for singles.

The ASFA’s definition of ‘comfortable’ is being able to enjoy recreational activities, occasional travel, top-level health insurance, mid-range priced car, and electronics.

Interesting, couples would need $40,560 each year for a modest retirement, and singles would need $62,269 per year.

Believe it or not, there is a better time to retire in Australia, and it’s not at the end of the financial year. It’s in December. Why? Because of the tax incentives. If you retire at the end of December, you only pay tax on six month’s income of that financial year, rather than the full year.

For example, if you are on $60,000 per year, you fall within the $37,001 – $90,000 tax bracket and will be taxed around $12,272. However, if you retire in December, you earn just $30,000 for the financial year, and then fall within the $18,201 – $37,000 bracket. So, you will then only pay $2,808 in tax. That’s a massive saving!

It’s your life, your retirement; therefore, only you can decide how you wish to live it. To ensure your retirement is all you want it to be, it takes planning and consideration. While we can help with the planning, we require guidance to devise the best strategy. And this can only come from you.

To ensure you meet your retirement goals, you need to consider the following:

• How and where you want to live in your retirement
• The type of lifestyle you will live in retirement
• When and how you would like to retire
• Will you have enough money to retire?
• Whether you’re on track to reach your goals
• Will your nest egg last see you through your retirement?
• How you will spend your time in retirement

For retirement confidence, you need to know the answer to these questions.

Transition to Retirement (TTR) is a Government strategy that allows people between the ages of 55 and 60 to draw down some of their super while still working. There are many benefits of TTR, including the ability to reduce your hours, increase your super, and increase your income. However, be wary, drawing down on your super early will affect your retirement income, which may, in turn, affect your retirement goals.