Depending on what stage of life you’re in, your retirement could be just around the corner or it might be years away. Either way, it’s never too early to start retirement planning. When you do start, here are a few elements you must consider.
Thirty years of retirement — wouldn’t that be nice? Of course, this depends on how old you are when you retire and a number of health factors, but yes, your retirement is likely to last at least two decades, maybe three.
In Australia, the current full single-rate age pension (as of February 2023) only provides around 25% of average weekly male earnings.
Yes — some people really do put all their eggs in one basket and assume their inheritance will get them through their entire retirement. However, your parents may end up spending all their savings and leave you with very little — as is their right (it’s their money, after all).
Alarmingly, many people don’t look at their super at all until it’s time to retire. When they do, they’re disappointed. Although some of your income automatically goes to your super through employer contributions, those contributions don’t guarantee you’ll have enough super to get you through your retirement. Research conducted in 2012 by Rice Warner Actuaries revealed that Australia has a superannuation shortfall of almost $1trillion, which means many Australians won’t have enough super to fund their retirement.
Keeping all these factors in mind, it’s important to start planning your retirement early to mitigate any financial shortfalls before it’s too late. With a bit of preparation, it's possible to plan for a long and comfortable retirement — and have one.
We suggest putting more into your super through salary sacrificing, lump sum contributions or using a transition to retirement strategy. These are all intelligent strategies to consider which will definitely boost your super — some of them have tax benefits too.
On top of the super-adding strategies we just went over, did you know you can use your super to start a pension that pays you a regular income? Some pensions even pay you an income for the rest of your life, negating the risk of outliving your savings. We’ve got heaps of retirement planning insights like this up our sleeve, and can also help you work out the best tax arrangement when it comes to retirement planning.
Contact us to talk about this in more detail.