Set a target. Think about when you plan to retire, how long you’re likely to spend in retirement and your ideal retirement lifestyle. Then decide on the income you’ll need to make it all possible.
Crunch the numbers. Check your super savings to see if you’re on track.
Boost your savings. If you need to save more, consider boosting your super with pre-tax salary sacrifice contributions or after-tax personal contributions. A financial planner can help you decide on the best approach for your situation.
Consider going part time. 41% of Australian workers over 45 plan to work parttime before they retire1, helping to ease the transition from full-time worker to full-time pleasure seeker. And depending on your situation, you can work parttime and continue to build your super, while supplementing your income with a Transition to Retirement (TTR) Pension, which is generally a lower-taxed income stream.
Change your asset mix. As you approach retirement, you’re likely to want to shift your investments from higher risk growth assets to more conservative income-generating assets. But with many Australians now looking forward to an investment time frame in retirement of 20 years or more, it may not make sense to abandon growth assets altogether.
Transition to retirement
A gradual move to retirement
Many people continue to work past age 55 due to different reason. Some need the money. Some wants to enjoy social interaction and the mental stimulation that a job offers. Some will reduce their working hours according to way to slowly ease into retirement.
The Australian Government has made it possible for you to continue your working while drawing down some of your super benefits. The policy known as transition to retirement, allows you to supplement your salary and maintain a comfortable lifestyle. You can also use this policy for tax saving purpose and boost your super before when you retire.
Once you purchase a TRP, you can transfer the money back to super at any time. This flexibility is a great option if you think you might return to full-time work at any point. However, a TRP can still be a smart strategy when you’re working full-time and want to boost your retirement income.
Some super funds have a minimum account balance, so it’s important to check if yours has a limit before you start a TRP.
A TRP isn’t always the most effective strategy. If you have investments outside super, you may actually be better off keeping your super as it is and using your other assets to supplement your income. In your retirement financial planning our advisor can help you choose the best option for your situation.