• what age do I want to retire
• what kind of lifestyle do I want to have
• where will I live
• what sort of travel will I want to do
• how often will I need to upgrade my car
• how will I spend my time
• do I want to leave an inheritance

A lot of people have things on their bucket list that they want to do in retirement. These things can be anything, but our most notably:

• travel –both domestically and overseas
• social & recreational activities
• lifestyle & living
• volunteer work
• helping your family

At Vove Financial we can put all these variables into your plan & strategies on how we can achieve these goals with realistic numbers.

• Superannuation
• Rental properties
• Selling your house and downsizing
• Investments, savings and inheritances
• Government benefits such as the aged pension
• Overseas pension funds

Depending on how you withdraw your super and at what age, there will be different tax implications worth investigating, which will depend on your individual circumstances.

In the meantime, some of the options you’ll have around withdrawing your super include:

Transition to retirement pension

A transition to retirement pension enables you to access some of your super via regular payments (once you’ve reached your preservation age), whether you continue to work full-time, part-time or casually.

This may provide you with some financial flexibility in the lead up to retirement. It can also be used as a way to fast-track your superannuation balance by making larger pre-tax contributions. There will be things to consider such as you’ll generally only be able to access a limited amount each financial year and there may be other tax consequences.

Account-based pension

If you’d like to receive a regular income when you do retire from the workforce, an account-based pension (also known as an allocated pension) could be a tax-effective option, noting the value of it will be based on the super you’ve saved, so won’t guarantee an income for life.

You also won’t be limited in what you can take out, but each year you’ll need to withdraw a minimum amount. Note, you can only transfer up to $1.7 million in super into this type of pension too.

Annuity

Another option is an annuity product, which generally provides guaranteed payments over a set number of years, or the rest of your life, depending on whether you opt for a fixed-term or lifetime annuity.

They tend to be a more secure option as they provide a guaranteed income regardless of what might happen in financial markets. However, you’ll be sacrificing some flexibility as you can’t usually make lump sum withdrawals and your life expectancy may also be a consideration.

Lump sum

Taking some or all of your super savings as a lump sum can be tempting, particularly if you want to pay off debt, assist the kids, or go on a holiday. However, it might not be the best option for everyone, as you’ll need to consider how you fund your lifestyle after the money is gone.

While you may be eligible for government entitlements, such as the Age Pension, it might not cover the type of lifestyle you’d like to have after you finish working.

Existing debt

When planning retirement, you may want to consider what outstanding debt you have and ways you may be able to reduce it while you’re still earning an income. The same principle can apply to upgrading your home or car while still working.

Check out these tips to reduce your debts before you retire and remember, if you’re experiencing financial hardship, talk to your providers, as most can assess your situation and help you find alternative payment plans.

Insurance

You might have personal insurance, possibly tied to your super fund, but it’s worth checking you have the right type and that it’s appropriate for you. After all, what you require in retirement could be quite different to when you’re working.

Investment preferences

Investments are part of many retirement planning strategies, and when you’re retiring, it’s worth reviewing your investment style and the options you’ve chosen.

For instance, in retirement, you might consider a more conservative approach with less risk, as when you’re younger you generally have more time to ride out market highs and lows. You could also adopt a ‘bucket’ strategy which means that rather than having all your pension funds in one investment option, you invest in several different options. This will give you more flexibility on where your money comes from as well as giving added security during the times when market conditions are unfavourable. 

Estate planning, including your will

It’s important to think about your estate planning needs. For instance, have you documented how you want your assets to be distributed after you’re gone and how you want to be looked after if you can’t make decisions later in life?

It’s likely that you’ll also want to consider your superannuation and pension beneficiaries including whether you want to transfer your regular income stream to your partner.