Do you have enough Super for retirement? Live longer and live smarter.
July 26, 2022

Do you have enough Super for retirement? Live longer and live smarter.

Planning for your retirement
If you are like many Australian’s you may wonder ‘How much Super do I need to retire?’ As life expectancies continue to rise, we all need to ensure we have enough in our Superannuation to live comfortably when we retire.

How to transition to retirement when you stop work
Whether you choose to gradually or take the plunge into full-time retirement, one of the key challenges faced by many new retirees is the need to fill each day productively. This emphasises the need to be mentally prepared for retirement, as it might not be as easy as you think.

Rather than exit the workforce overnight, a transition to retirement pension (TTR) strategy provides you with the ability to receive an income stream from your super without having to give up work entirely. This means you can reduce your working hours while having the same take home pay. Contact our expert team who can take you through the process of transitioning slowly from work to retirement and develop a TTR strategy to suit you.

Developing a savings plan for retirement
There’s no magic number when it comes to retirement. To determine how much to save, it’s important to understand the type of retirement lifestyle you hope to enjoy. That will help you to determine how much annual income you might need to fund your future.

Creating a retirement savings plan can also help you understand what your desired retirement income might look like. Not only will this plan show how much you’ll need to save, it can also help you understand costs you may need to scale back to achieve your goals.

There are a number of strategies you can consider as part of your savings plan.

  • Explore your super contributions
    • For starters, you may be able to increase your before-tax super contributions. You can talk to your employer about making contributions via salary sacrifice, which is where part of your before-tax wage or salary is directed to super instead of being paid directly to you.
    • You may prefer to make a contribution out of your own pocket; earnings on your super savings are only taxed at 15%, but be aware of the contribution caps.
  • Consider your spouse’s super
    • If you have a spouse or partner, it may be worth making a contribution to his or her fund. Once again, be aware as annual limits on super contributions do apply. Our financial advisers can help explain these limits.
  • Review your super investment strategy
    • Now may also be the time to review your super fund, to check your nominated investment strategy is in line with your tolerance for risk.
    • Pre-retirees may be tempted to shift to more conservative options, but it could pay to have part of your retirement savings, including super, invested in growth assets to generate long-term capital gains.
  • Pay off the mortgage or grow your super?
    • If you still have money owing on your home loan, is it is better to use spare cash to pay down this debt or add the money to your super? It is a good idea to speak to your financial adviser, who would be able to advise the best option for your circumstances and the economic climate. Our team can provide the best advice on the option that is going to give you the best outcome to achieve your savings goals.
  • What is a self-managed super fund? Is it a good strategy?
    • A self-managed super fund (SMSF) can have lots of positives, allowing you to have more control over how your super is invested, within superannuation and taxation laws.
    • In addition to determining if you have sufficient capital for a SMSF to be worthwhile, consider whether you want the added responsibility, as managing your own retirement savings comes with costs of its own.
    • Keep in mind there are also strict laws and regulations that govern SMSFs. Contact our team for the best advice on SMSF strategies and planning for your retirement.

Choose the right investment strategy
Apart from the strategies outlined above, there are a number of questions you need to ask yourself before making any decision on the strategy that is right for you and your family.

  • What are you wanting to achieve from your investment?
  • What level of risk can you accept?
  • What return are you seeking?

These are all extremely important questions to answer before you make your investment strategy decision.

There are many options when it comes to planning for your retirement and making the most of your retirement savings through Superannuation. WealthSmart’s team of trusted advisors are here to help you make the right decisions that will set you up for the retirement you need. Call us today on 1800 765 100 or visit our website for more information.

General advice warning. This advice does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. Should you require any help please contact Wealth Smart on 1800 765 100.