Retirement Planning Services.
Secure Your Retirement.
For many Australians, retirement marks the beginning of the golden years of life, where hard work and long days are replaced by more recreation and family time. But in order to maximise lifestyle goals in those decades ahead, pre-retirees need to plan and save much more than the generations before them.
With the average Australian now living well into their 80s and the cost of living rising by the year, preparation is the key to making sure savings last as long as they need to.
How much super do you need?
While everyone has different lifestyle aspirations, the Association of Superannuation Funds of Australia (ASFA) suggests single people need $545,000 for a ‘comfortable’ retirement and couples need $640,000. The benchmark factors in costs like health insurance, home repairs, car upkeep, an annual trip within Australia and an overseas holiday every seven years. It also assumes retirees are aged over 65, will live into their 80s and own their own home.
However, some people find that’s not enough for how they’d like to spend their retirement years, particularly if they enjoy annual overseas trips and regular dining out. As such, many pre-retirees are turning to financial planners for tailored advice on how to structure their retirement savings so they can go the distance. A financial planner can help to work out how much an individual or couple may need, based on their current standard of living, their future plans and their assets and income.
If you don’t have enough super
Fortunately, there are a number of options for people who don’t feel like their savings will last as long as they need to. Here are some potential considerations.
Extra contributions – If you can afford it, adding a few hundred dollars a week can make a difference over the longer term. From July this year, people aged between 65 and 74 can contribute to super without meeting the ‘work test’, which has previously required people in this age bracket to be working for a specified amount of hours before making additional contributions to super.
Downsizing or a reverse mortgage – Unlocking some of the value of the family home is one way some retirees add to their income.
Speak to a qualified financial adviser – An adviser can help to work out ways to top up super, invest for retirement and budget to meet lifestyle desires. They can also help with estate planning.
The age pension – Once you reach a certain age and if you don’t have enough income or assets, you may be eligible for the age pension. Keep in mind, the age pension assumes a more modest lifestyle. You can calculate if and when you may be eligible for the age pension by using MoneySmart’s retirement calculator.
from 1 July 2022, people are eligible to contribute to Super between the ages of 65 to 74 without meeting the ‘work test’. This was not possible previously. The benefit of this option is that people with savings (from inheritance or property downsizing) can top up their super which is concessionally taxed or in the pension phase is tax free.
When to start retirement planning.
Generally speaking, earlier is better when it comes to retirement planning. There are many different components that contribute to how much people have to live on after they stop working, including their assortment of investments, spending patterns and how they plan.
Therefore, getting the balance right often takes a bit of thought and preparation. Speaking to a qualified financial adviser can help to make the planning stage a lot easier. If you think you may benefit from personalised financial advice, speak to one of our representatives today.
Why Chelsea Wealth?
We work with you to identify and prioritise your personal financial goals and help you maximise the chance of your success. We’re here to help you secure your financial future.
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Contact us.
Newcastle
Ph 02 4032 4400 | fax 02 4032 4401
newcastlewest@chelseawealth.com.au
Penrith
Ph 02 4721 5800 | fax 02 4721 5088
penrith@chelseawealth.com.au