top tips for retirement

Top tips to live your retirement dream

Retirement means something different to everybody. For some it means having more time to spend with family and watch their grandchildren grow, and for others it could mean taking the overseas trip they've always dreamed of or hitting the road to expand their horizons.

However, the one thing that everyone approaching retirement has in common is, that the choices you make today about your superannuation fund will ultimately determine whether or not your retirement goals become reality.

This is not always as simple as it sounds.

Did you know

Almost half of Australians aged 45 years and over expect their main source of personal income in retirement will be from a superannuation, annuity or allocated pension plan?
Yet when you look at the actual position of retirees in this age group, two thirds currently receive government pension as their principle source of retirement income, with just 15 per receiving their main source of retirement income from a superannuation, annuity or allocated pension plan[1].

That's a huge gap between Australians' goals and the reality of their retirement.

And with current fortnightly age pension rates just $782.20 for singles and $1,179.20 for couples, you need to ask yourself are my current super contributions enough to ensure my retirement reality will be as close to my goals as possible?

To make sure you're getting the most out of your final working years, provided the following seven tips to boost your super savings and help live the retirement of your dreams.

1. Increase your regular investment or make one-off payments
A little bit now can mean so much later, so making regular super contributions is a great way to boost your nest egg. Once you have made your initial contribution there is no minimum additional contribution required.
You can increase your current regular investment or make a one-off payment by mail, BPay or direct debit.

2. Beware contribution caps
Before making additional contributions, ensure you're aware of how much you've already contributed that financial year so your caps aren't breached. Caps are applied to the total amount of contributions made across all superannuation funds, not just limited to a single one.
For more information on the Concessional and Non-Concessional Contribution Cap click here.

3. Government Co-contribution

By making a personal (non-concessional) contribution, you may be eligible for the Government Co-contribution. That means the Federal Government may contribute up to 50 cents for every dollar you put towards your own superannuation (capped at a maximum of $1000 per year).
To find out if you're eligible for the Government Co-Contribution click here.

4. Spouse contributions
Contributing super on behalf of your spouse is a very tax-efficient way for a couple to save for retirement.

If your spouse is eligible, either by not working or earning less than $10,800 per year, you can contribute to their super and receive a tax offset of up to $540 each financial year reducing your tax payable.

The good news is there is no limit to the amount you can contribute to your spouse's super, however you can only claim a tax offset of 18 per cent on up to $3000 of spousal contributions (where they earn less than $10,800).

Keep in mind that there may be tax implications if caps are breached.
The Superannuation Plan accepts a wide variety of superannuation contributions, including those on behalf of your spouse. For more information speak to your financial adviser.

5. Consolidate your super and consolidate your future

The Australian Tax Office estimates that there is $16.8 billion in unclaimed super in Australia today. Is some of it yours?
Losing track of various super funds over your life could mean you have to remain in the workforce longer because you haven't gained the full investment benefits of your funds.

So taking a just few minutes to consolidate your super accounts could be the different between your retirement goals and actually living out your retirement dream.
Keep track of the different employers you have had over the years.

Often when you leave a job, your superannuation remains in that employer's chosen fund or is rolled over into an eligible rollover fund.
By making sure you know where all your super is kept and consolidating it into one account, you can help build your retirement savings faster and adopt a much more focused strategy.

Plus you'll save on paperwork.
To consolidate your super accounts, call John McAuliffe on 07 3848 1088

6. Salary sacrifice

For individuals who earn more than the threshold for Government Co-contributions or spouse contributions, salary sacrificing into your superannuation may be a good option.
Salary sacrifice simply means that if you earn more than $37,000 per year, you can nominate part of your pre-tax income to be paid directly into your super account by your employer. Your reduced salary then becomes your income for tax purposes.

7. Work with your financial adviser

Of course, everyone has their own unique retirement expectations so it is important to assess the previous six strategies according to your own individual circumstances.

This may seem daunting especially for those who are relatively unfamiliar with the superannuation process and which options may be best for them. This is where speaking with a professional financial adviser can help.

Your financial adviser may be able to assist you by:

Answering any questions you have on these various strategies;

Assessing your individual financial position;
Discussing your investment risk profile to determine if your current exposure to various asset classes (e.g. shares, fixed interest, listed properties) is still appropriate;
Identifying your insurance, investment and retirement needs;
Highlighting appropriate tax-effective strategies and asset allocation models; and
Structuring solutions to meet your individual needs and objectives.