Maximising Your Super Savings - Smart Super Moves for a Comfortable Retirement
Superannuation
Think of superannuation as your financial sidekick—a trusty companion that grows your wealth while you’re busy living life. Here’s the plot:
1. Accumulation Phase: Building Your Super
- During your working years, your employer channels a portion of your salary into your super fund. You can also contribute extra (like a secret stash) to turbocharge your super with the power of compounding!
- Behind the scenes, your super fund invests in assets like cash, bonds, shares, property and alternative assets. It’s like your money attending a high-stakes gala!
2. Drawdown Phase: Unleashing Your Super Powers
- Retirement is when the curtain rises, and you step into the spotlight. Your super is now ready for action!
- But how do you access it? Let’s explore your options:
Want to learn more about superannuation? Read our article here which explains the contributions caps and accessibility – Superannuation – Education
Options for Your Super in Retirement
1. Leave It In: The Patient Approach
Imagine your super as a fine wine ageing gracefully. Leaving it in your super fund means:
- Tax Benefits: Earnings within super are usually taxed at a lower rate. Sip that tax advantage!
- Investment Continuity: Your money stays invested, potentially growing further. It’s like planting a money tree.
- Flexibility: You can withdraw funds when needed—like summoning your super-powered sidekick.
2. Lump Sum Withdrawal: The Grand Adventure
Picture this: retirement has arrived, and you’re planning a dream vacation. Taking a lump sum from your super:
- Immediate Gratification: You get a chunk of cash upfront. It’s like finding buried treasure!
- Tax Considerations: Some withdrawals are tax-free, while others come with a tax tag. Choose wisely, Captain Super!
3. Account-Based Pension (ABP): The Steady Paycheck
An Account-Based Pension is your retirement paycheck:
- Regular Income: Your super fund pays you regularly. It’s like having a financial butler.
- Tax-Free After 60: Once you hit 60, ABP payments become tax-free. Cheers to that!
- Investment Choices: You still get to play the investment game.
4. Annuities: The Safety Net
Annuities are like a cosy blanket for your finances:
- Guaranteed Income: You buy an annuity, and it pays you a fixed amount for life. Predictable, like clockwork.
- Peace of Mind: Market ups and downs won’t ruffle your annuity feathers.
- Trade-Offs: Less flexibility, but hey, security has its perks.
Accessing Your Super
1. Preservation Age and Conditions of Release
- Your preservation age depends on your birth year (somewhere between 55 and 60). It’s like unlocking a level in a retirement video game.
- Conditions of release include retirement, leaving employment after 60, or hitting the big 6-5.
2. Transition to Retirement (TTR)
- Still working but want to dip into your super? Consider a TTR strategy.
- It lets you withdraw some super while keeping your cape on at work.
Remember, your super saga is unique. Seek advice from a financial adviser—the Gandalf of your financial fellowship—to tailor these strategies to your quest. And may your retirement be as golden as an Australian sunset! 🌅🏖️👴👵 : Australian Government, “Retirement Income Review,” 2020.
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Superannuation Calculator
Using Government Resources such as the Moneysmart Superannuation Calculator can help you see if you are going to have enough in your Superannuation fund in retirement.
Please note that this article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and seek professional advice before making any investment decision.
This information is true and correct as of 27 July 2024, prior to making any changes we recommend you read Government resources and seek Financial Advice prior to making any changes.
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