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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