For most people, compulsory superannuation payments and the pension, will not be enough to provide a desirable lifestyle in retirement. This is why retirement planning is so important.
With Australians living longer thanks to advances in medical technology and rising standards of living, many people are unprepared with savings to last the distance. A high level of savings are essential to attain the kind of lifestyle that you want, and the sooner you start the process of saving, the better. To have a million dollars by the age of 65, 45-year-old would need to save $1,698 per month for the next 20 years, whereas, a 25 year old would only need to save $345 per month for that same 20 years, because of compound interest.
Retirement goals and a retirement plan can ensure that your savings won't run out and is personal to you. To create a useful retirement plan that actually works requires a process of evaluating, in a realistic way, how much in savings you will need for retirement and a frank assessment of your current savings. The process of formulating a retirement plan require you to:
- clarify your issues and goals
- benchmark your current position
- convert your goals into a plan
- convert this plan into achievable steps
It is also important, once this plan is formed, to keep it updated through both movements in markets and life events that may alter it, like the birth of children or the purchase of a family home. On top of this, you should check it every 3-5 years, to ensure that the plan is still relevant and realistic.
Stepping from a full time work week to no work can be a jarring process, so for most people, a staged process of stepping away from work can be a good way to transition into retirement, as well as boosting superannuation payments. If your retirement is to be funded, or partly funded by the pension, transitioning out by these means can make you eligible for the work bonus.
The Work Bonus is an incentive for pensioners to remain in the workforce past age pension age by increasing the amount you can earn before your pension is reduced. You do not need to apply for the Work Bonus. If you receive eligible employment income, we will automatically apply the Work Bonus to your income test.
Come into a Belmores branch to have a discussion about your options, and start the process of a retirement plan. There is no obligation and it could make your retirement much more comfortable.