Once you’ve got a target figure, Rest’s retirement calculator can give you an idea as to whether your super is on track.
2. Make extra contributions to boost your balance
Putting extra money into great in your pre-retirement years can not only boost your balance, but offer tax benefits too.
Depending on your circumstances, you might make contributions before tax, such as salary sacrificing (known as concessional contributions, which for most people are taxed at 15 per cent); or contributions after tax (known as non-concessional contributions), which you can claim as a deduction at tax time.
3. Find out when you can access your super
It’s all well and good putting all this money into super, but when do you actually get to spend some of it?
The age at which you can access some, or all of your super, is known as your preservation age. It can be between 55 and 60, depending on when you were born.
4. Consider a transition to retirement strategy
Retirement doesn’t have to be about suddenly going from full-time work to no work at all. If you are thinking of scaling back work, you might want to look at a transition to retirement (TTR) strategy. It allows you to work and access some of your super at the same time, through a TTR pension if you have reached your preservation age.
This might enable you to reduce your work hours while still enjoying the same take-home pay to which you’re accused.
Or you could consider if using a TTR strategy is available and appropriate for you to continue working full-time and pay less in tax. Generally, the strategy involves increasing your salary sacrifice into super (which is taxed at only 15 per cent – less than most people are normally taxed), while receiving your TTR pension payments which are generally tax-free if you are 60 or older.
5. Think about living arrangements and aged care
“If you’re a pre-retiree, you should start to consider what your living arrangements will be during retirement, and how this can impact your retirement balance,” Potts says.
If you plan on downsizing your home, you may be able to put up to $300,000 from the proceeds of your sale into super.
You might also want to think about future aged care requirements. “This is a cost that should be factored into your retirement planning,” Potts says.
6. Establish tax-effective income streams for your retirement
“There are three main sources of income at retirement: your superannuation, non-superannuation assets, such as returns from investments, and, if you’re eligible, the Pension age,” Potts says.
Managing these in the most tax-effective way can make a big difference to your retirement.
7. Seek financial advice
If mapping out financial goals, transitioning to retirement and navigating all the tax implications seems a bit complicated, well, that’s because it is. A bit of advice usually doesn’t hurt.
“The earlier you seek advice about how to prepare for your retirement, the more likely you will achieve your retirement goals,” Potts says.
You could see a financial adviser or talk to your super fund.
Retirement is one of the most important stages of your life. To find out more about retirement planning, Transition to Retirement accounts, and Pension accounts, visit rest.com.au/retirement
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