Retirement is a time of life for you to relax and do the things you have always wanted to do. Therefore, careful planning can help ensure you are financially comfortable. Prior to retirement, there are some important questions you need to ask yourself, including:
- What do you want to do in retirement?
- How much money will you need to do it?
- Do you need a regular income?
- Where will this income come from?
- When can you retire?
- How and when will you be able to access your super?
- What Government support will you be eligible to receive?
Planning ahead can assist you in making the most of what you have and help you achieve financial security, reduce uncertainty and enjoy your retirement. There are many different options available to help fund your retirement. These include taking your super as a cash lump sum, purchasing an income stream product to give you a regular income or a combination of both.
If you have reached or are above your preservation age, you may be able to benefit from a transition to retirement strategy where you start a pension from your superannuation fund to supplement your reduced employment income. You are then able to make salary sacrifice contributions to compensate for the pension payments coming out. Generally speaking, your net income position remains the same as before, so increased income is not a benefit of this strategy. The benefit is the tax you will save whilst making the most of contributing to superannuation in the lead up to retirement.