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Smart retirement strategies

Life is full of unplanned events. Have a strategy.

The secret to securing a healthy income in retirement is knowing what you want. Here are some key questions to help you get started.

  • What age do you plan to retire at?
  • What sort of lifestyle do you want?
  • Have you paid off all your debts?
  • Will you need additional money for other needs, eg buying a new car or going on a holiday?

Once you know what you want you can start planning. And we can help you. Start on your strategy today.

How much will you need?

You’ll need approximately 60% of your final pre-retirement salary each year for what could amount to 20 years or more. A financial adviser can help you evaluate exactly how much you'll need and how you're tracking to reach that goal.


 

Transition to retirement after reaching your preservation age

If you have reached your preservation age^, you may be able to use your superannuation to start a ‘Transition To Retirement’ pension. This strategy can be beneficial if you wish to reduce your hours of employment while maintaining your current income or if you wish to start making pre-tax salary contributions into your super while moving some of your super into a ‘Transition To Retirement’ pension. By doing this you can draw a regular income from your pension to replace your reduced salary. A financial adviser can determine if you are likely to benefit from this strategy.  

Watch our Managing Retirement Risks - 5 Part Series to find out more about key retirement risks for pre-retirees and retirees and how to address them. Presented by Professor Moshe A Milevsky.

^ Preservation age is age is 55 for those born before 1 July 1960 and gradually increases to age 60 depending on your date of birth. Please visit the ATO website at www.ATO.gov.au for more information.


 

Protect your balance

As you get closer to retirement, market movements can have a greater effect on your super balance. That’s why it’s important to protect your balance from negative movements in the market.

MLC MasterKey Investment Protection protects your capital or income against market downturns.


 

Accessing your super – cash payout or income stream

Starting an income stream investment (such as an account-based pension) within super, rather than taking your savings as a lump sum after reaching your preservation age^ and retiring, can be much more tax effective. This is because:

  • no lump sum tax is paid when the benefit is used to start the income stream
  • no tax is payable on investment earnings in the fund
  • between age 55 and 60, any taxable income payments attract a 15% tax offset; and
  • when you reach age 60 you can receive unlimited tax-free income stream payments without having to include them in your annual tax return. This could also reduce the tax payable on your non-super investments.

^ Preservation age is age is 55 for those born before 1 July 1960 and gradually increases to age 60 depending on your date of birth. Please visit the ATO website at www.ATO.gov.au for more information.

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