A lifetime of super – and it’s not just about retirement!

Life is for living, not retiring, but there may come a time in your life when you either want to change what you’ve been doing and stop working completely, or take a long break and work out what’s next.

To be able to have this choice though, it’s essential that you start planning early, even if you think retirement is for everyone else it is never too early to start saving for retirement and building up your nest egg.

As a rule of thumb, it is advised that people should aim for a retirement income of 50% to 70% of pre-retirement salary/wages. Based on this principal, it is projected you will need to save around 15% of your income for 40 years. The problem here is that your employer is only obligated to provide superannuation contributions for you at the current rate of 9.5% of your income per annum.

So, how can you achieve this goal? You can start contributing to super earlier in your working life, raise your personal contributions to supplement overall contributions to the 15% figure (keeping under the annual limits of course), and be mindful of the following tips throughout your working life.

Young, single and independent

  • Putting money into your super from an early age, even a small amount lays the foundations for future choices.
  • Maximise your government co-contributions—they can possibly add thousands to your super.
  • When looking at your insurance needs, take out disability insurance through your super fund. It is often cheaper and a more tax-effective way of providing insurance cover.
  • Choose an investment approach that suits your long-term risk profile.

A family and a mortgage

  • Your responsibilities have changed and your focus may be on repaying the home loan, but don’t forget about your super.
  • A mortgage and young children mean insurance is a top priority. Taking out life and disability insurance can be a good decision at this point.
  • Check entitlement for a tax offset on spouse superannuation contributions and government co-contributions.
  • Review your investment strategy and risk profile.

The “in between” years

  • A higher income and a reduced mortgage open up the prospect to boost your super but make sure not to exceed contribution and balance limits.
  • Find out if salary sacrifice could boost your super savings.
  • Review your insurance cover and investment risk profile.

Retirement is looming (maybe)

  • There are some good incentives to those who are over 55s to contribute to superannuation but keep an eye on your total balance.
  • Consider mixing salary sacrifice with a transition to retirement pension if beneficial.
  • Review your insurance cover, investment strategy and risk profile.
  • Start comprehensive retirement planning or a new career focus.

Down tools or start anew

  • You’ve reached your goal! For retirees over 60, withdrawals and pension payments are tax free!
  • Review your investment risk. Keep enough growth in your portfolio to ensure your money lasts as long as you do.
  • Review your insurance.
  • Stay active and enjoy life – or launch into your next career. Life is for living, and enjoying!

Remember, it’s never too late – or early – to start at Sciacca’s we can help you to plan for your future and boost your retirement savings. Call John Sciacca today for a no-obligation consultation on 07 3357 5553 or email john@sciaccagroup.com.au


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