Tips to help you Retire with More Money
By managing your retirement savings now, you may improve your financial position in the future. Here are 8 tips to help you better meet your retirement goals.
Tip 1: Contribute more into super
Superannuation may help you lower your income tax as Australian laws favour superannuation investments. Earnings are taxed at a maximum rate of 15% compared to investment earnings received outside superannuation which are taxed at your marginal tax rate, which could be as high as 46.5% (including the Medicare levy).
Tip 2: Consider a regular savings plan
Rather than trying to pick the peaks and troughs in the market, buying small parcels of shares or units in superannuation over a period of time helps you to average out the cost. This helps reduce the risk of buying over-priced shares while building up your savings.
Tip 3: Consider a Transition to Retirement pension
Depending on your circumstances, if you’re 55 or older you could consider a Transition to Retirement (TTR) strategy which involves increasing the amount you put into superannuation. You can then top up your reduced salary by drawing an income from your accumulated super. Because of superannuation tax concessions, the amount you need to draw down to top up your salary is generally less than the extra amount you are contributing into superannuation. Click here for more on Transition to Retirement.
Tip 4: Take advantage of the superannuation rules
Superannuation can provide many great concessions and benefits when used properly. Salary sacrificing to reduce assessable income and tax, accessing Government benefits via co-contributions, spouse offsets, contribution splitting to help top up your spouse’s superannuation account, reducing capital gains tax after a sale of an asset and starting a tax-free superannuation pension are all possible and you may want to consider them for your situation.
Tip 5: Don’t forget Government benefits
You should try to arrange your finances, if possible, to maximise Centrelink benefits such as the Age Pension. You may also be entitled to state and federal Government pensioner or seniors cards as well as the Commonwealth Seniors Health Card.
Tip 6: Financing an emergency fund
Life is full of surprises. We can plan for the expected but we should also plan for the unexpected. Whether it’s having a car suddenly brake down or developing health problems that require immediate treatment, it’s important to set aside an emergency cash fund so you can meet such costs as they arise.
Tip 7: Have a budget and stick to it
Establish your current cost of living and determine a spending budget. Once you have a budget, and a savings plan stick to it and don’t be deterred by unnecessary expenses which may erode your financial position.
Tip 8. Talk to a professional
One of the keys to successful investing is to develop a plan and maintain your course. With sound financial advice, solid goals and clear objectives you can ensure your reach your financial goals.
