The average life expectancy today for men is 86 and for women it's 89.
As you approach these ages, the life expectancy will most likely increase with cures for diseases and therapies for ones like Cancer, heart attack and Alzheimer's.
Will you be able to afford to live a reasonable life when you retire?Will there still be an old age pension and what will it be?Can you afford to be supported by your family - would you really want to burden them in this way? What questions do you need to answer now to better prepare yourself for retirement? As a start the following 3 questions:
No career, no grand plans for the future - what could have been, has already been.
Now is the time to reap what you soed from life - good bad or ugly.
Therefore, leaving your retirement planning close to retirement is also too late.
The time to do it is NOW.
No matter how old you are, and the closer to retirement you get, the greater the urgency.
By starting immediately, you are better able to balance your current needs with those forecast in the future and during retirement.
A common estimate of how much is enough for retirement, is having 60 - 70% of your pre retirement income after tax each year, assuming you own your home outright.
E.
g.
if you retirement salary is $100,000, then you need between $600 - $700,000.
If you want to travel, visit family overseas or interstate or have health issues, this amount will vary as well.
Question: How do you accumulate this sort of money? Answer: Depending on how close you are to retirement, your financial advisor will guide you towards which strategy will suit your situation the best.
The closer you are to retirement, the more imperitive it is to review the new superannuation policies the government introduced to make it one of the most tax effective investments in Australia.
The government has slashed the tax on any income from a superannuation pension to zero if you are over 60 years old.
You also don't need to fill in a tax form if your income is from a superannuation pension.
Therefore, superannuation will only be taxed twice - not three times as before.
That is, when the money goes into the superannuation fund and then when the savings earn interest.
The tax on the end benefit will finish from 1st July 2007, provided you are over 60 years old.
Some steps to consider:
if you don't have enough superannuation, consider:
A lump sum may be required to pay out your mortgage and do some things around the house and possibly settle some outstanding financial matters and even go on an overseas holiday.
The remaining funds can be left in your super and taken as an allocated pension.
There are no more complicated pension rules - there is only one rule which exists which dictates how much the minimum amount you must take out of your pension each year.
E.
g.
if you are aged between 55 - 64, you must take 4% of your total super fund.
There are some basic rules for you to consider and discuss with your Financial Advisor as you near retirement:
As you approach these ages, the life expectancy will most likely increase with cures for diseases and therapies for ones like Cancer, heart attack and Alzheimer's.
Will you be able to afford to live a reasonable life when you retire?Will there still be an old age pension and what will it be?Can you afford to be supported by your family - would you really want to burden them in this way? What questions do you need to answer now to better prepare yourself for retirement? As a start the following 3 questions:
- What income would you like during the 20 years of retirement?
- What capital do you need and how should it be invested to provide the income you require?
- How can your retirement savings be built to meet your needs?
No career, no grand plans for the future - what could have been, has already been.
Now is the time to reap what you soed from life - good bad or ugly.
Therefore, leaving your retirement planning close to retirement is also too late.
The time to do it is NOW.
No matter how old you are, and the closer to retirement you get, the greater the urgency.
By starting immediately, you are better able to balance your current needs with those forecast in the future and during retirement.
A common estimate of how much is enough for retirement, is having 60 - 70% of your pre retirement income after tax each year, assuming you own your home outright.
E.
g.
if you retirement salary is $100,000, then you need between $600 - $700,000.
If you want to travel, visit family overseas or interstate or have health issues, this amount will vary as well.
Question: How do you accumulate this sort of money? Answer: Depending on how close you are to retirement, your financial advisor will guide you towards which strategy will suit your situation the best.
The closer you are to retirement, the more imperitive it is to review the new superannuation policies the government introduced to make it one of the most tax effective investments in Australia.
The government has slashed the tax on any income from a superannuation pension to zero if you are over 60 years old.
You also don't need to fill in a tax form if your income is from a superannuation pension.
Therefore, superannuation will only be taxed twice - not three times as before.
That is, when the money goes into the superannuation fund and then when the savings earn interest.
The tax on the end benefit will finish from 1st July 2007, provided you are over 60 years old.
Some steps to consider:
- Delay retirement until the 1st July 2007 and if possible, until you turn 60
- You are able to contribute up to $1million into your superannuation fund until 30th June 2007 and therefore some people are selling investment properties and share portfolios and pouring these funds into their super in preparation for their retirement
- Some people are even delaying paying their mortgage (which is non deductible debt) and put this money into superannuation and then paying off the mortgage when they retire.
- This way they are paying 15% tax on their salary sacrificed super instead of high rates of tax on after tax income which is used to pay off the mortgage.
(up to 47% in some cases)
if you don't have enough superannuation, consider:
- Modify your budget to redirect greater funds to savings / superannuation.
- Forget retiring early and consider working longer
- Learn more about 'approaching retirement' part time arrangements
- If your home is debt free, consider selling it and moving somewhere more appropriate for retirement and invest the excess into your retirement.
- Learn more about reverse mortgages
- Meet a great Financial Advisor, Accountant and Mortgage broker to work with you now.
- Speak to your Financial Advisor about reallocating any money invested, into higher risk portfolios which have a potential of higher returns.
A lump sum may be required to pay out your mortgage and do some things around the house and possibly settle some outstanding financial matters and even go on an overseas holiday.
The remaining funds can be left in your super and taken as an allocated pension.
There are no more complicated pension rules - there is only one rule which exists which dictates how much the minimum amount you must take out of your pension each year.
E.
g.
if you are aged between 55 - 64, you must take 4% of your total super fund.
There are some basic rules for you to consider and discuss with your Financial Advisor as you near retirement:
- Begin planning your retirement now
- Pay off your mortgage asap
- Invest the maximum in your superannuation fund.
Take advantage of the tax effectiveness of superannuation. - Avoid paying high fees on your superannuation - shop around
- Reconsider early retirement and consider the additional costs of doing so.
You lose out on the tax free income on pensions for those aged over 60. - Invest in growth assets.
- If you have an investment portfolio consisting of shares and property, get advise on whether you should liquidate them and poor the proceeds into superannuation.
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