No two dreams of retirement are alike. We each have our own ambitions and goals, things we want to achieve – more time with family, more travel, honing our carpentry skills, finally writing that memoir. While it’s important we think about what our retirement will look like, it’s equally important that we think about the years leading up to it.
Some of us may want to wind back a bit earlier but are wary of living on a reduced income. Some may want to work fulltime and contribute as much to super as possible. The financial world is complex; while this can make it hard to navigate for the lay person, it also means there are many options available to you.
As soon as we reach our preservation age, great opportunities open to us that can transform our final stint in the workforce and the years beyond. To take advantage of what’s on offer, though, you need to devise your transition to retirement strategy.
What is my preservation age?
The preservation age simply refers to the age at which you can access your super. It’s set by the government and determined by the year of your birth. The table below will help you figure out your preservation age.
Why a transition to retirement plan is important
How do you approach retirement? What do the years between your preservation age and your retirement look like?
Many of us find the idea of an abrupt end to our work life unappealing. To go from a fulltime job to no work at all can be jarring. Much better to ease our way into retirement, scaling back the hours progressively.
Others, of course, would prefer to squeeze every last drop out of their careers and bolster their superannuation funds as much as possible before the last bell rings.
Both of these scenarios present one particular problem: how do we reduce our hours or contribute more to super without having to reduce our take-home pay and inhibit our lifestyle?
Well, once we hit our preservation age and gain access to our super, new possibilities become available.
For instance, if you want to gradually reduce your hours and maintain a similar lifestyle, there are strategies that we can help you implement that will supplement your income.
If, on the other hand, you’re keen to maintain your work hours ‘til the end, you can increase your super fund without reducing your take-home pay through mechanisms such as salary-sacrificing or tax-deductible contributions.
It’s complex, so seek advice
There are lots of moving parts to the financial world and, thus, a lot of paths to choose from. To determine the best option for you, it’s wise to sit down with an experience adviser who is well versed in the superannuation and retirement industry, and discuss your circumstances and your desires.
With a clear picture of what you want your retirement to look like, as well as the years leading up to it, we can advise you on the most suitable path for you.