With good preparation and the right advice, you can make sure you have enough savings to do what you want to do when you retire.
Which is why AustralianSuper has prepared information for you below on the following topics:
Planning ahead for your retirement
Even though your retirement may still be a few years away, it's important that you start planning early.
This can make a big difference to the type of lifestyle you're able to lead when you stop working.
Of course, you can’t do everything at once. Some things can be done now and others will need to wait until later. What's most important is for you to get started, which means:
Decisions when you retire
When you finish working, there will be some decisions you need to make about your super. Having a good understanding of the options available can help you make decisions that meet your needs.
To start with, you will generally be able to access your superannuation when you reach your preservation age, which is at least age 55, and retire.
Depending on your circumstances, you may want to leave your superannuation untouched for a while, and take it later when you need it. You can keep your money invested in a superannuation fund for as long as you like.
When you are ready to take your superannuation, you will have a few options:
For more information on the options above, visit AustralianSuper Pension, or call us on 1300 300 273 weekdays from 8am - 8pm (EST).
Taking a lump sum
If you decide to take all or part of your benefit as a lump sum you may be subject to tax on that amount if you are under age 60.
The amount of tax levied will depend on the components of your benefit and your age. If you are interested, the Australian Taxation Office can provide you with further information.
Taking an income stream
If you are under age 60 and take your superannuation as a pension or annuity, you can defer or minimise the tax you would otherwise pay if you took it as a lump sum at that time.
This may benefit you in several ways:
- Deferring tax means you have a bigger investment working for you
- Tax concessions apply to earnings on investments in certain pensions and annuities
- You may qualify for concessional treatment under the income test for Centrelink purposes.
If you are 60 or over, you pay no tax on pension payments received from a pension or annuity established with superannuation monies.
Government age pension
The Government age pension can supplement your superannuation and any other investment income you may have. Currently, the maximum pension amounts (effective 20 March 2007) are as follows:
- $546.80* per fortnight for a single person
- $913.60* (total) per fortnight per couple.
To be eligible for a full or part pension, you will need to satisfy certain requirements set by the Government:
- You must have reached age 65 if you are a man and above certain qualifying ages for women
- You must be an Australian resident and have lived here for 10 years (note: there are some exceptions)
- Your income or assets must be below certain limits.
It's important to note that age pension payments are not backdated. You should apply to Centrelink as early as possible and you can, in fact, apply up to three months before you are actually eligible.
* This payment includes a pension supplement that is currently: single $18.80, couples $15.80 each. Couples separated due to ill health receive $18.80 each. Source: As at 20 March 2008 www.centrelink.gov.au
Obtain financial advice
Before applying for the age pension, you may wish to talk to a financial adviser.
They can help you determine whether you are likely to qualify for a pension, and can advise you of legitimate strategies to reduce your income and assets for assessment purposes.
Your AustralianSuper membership gives you access to commission-free, fee-for-service financial advice through Industry Fund Financial Planning (IFFP).
Your initial meeting with an IFFP financial adviser is provided free of charge. To arrange a time, call AustralianSuper weekdays from 8am-8pm (EST).