No two dreams of retirement are the same. We each have our own desires and ambitions. Fortunately, when it comes to your transition to retirement, there’s more than one way to go about it. Of course, you have to be aware of your options, which is why we strongly urge the use of an experience financial advisor.
What’s your transition to retirement strategy?
The first thing to do is decide what’s important to you. Do you want to ease gradually into retirement by reducing your hours, or use your last years in the workforce to boost your super balance?
Australia’s superannuation system gives you the option to transition to retirement (TTR). The manner of the ‘transition’ is yours to decide. Here are two paths you might consider:
Continue working full time to increase super savings WITHOUT reducing take-home pay. You can do this by either salary-sacrificing or making a tax-deductible personal contribution.
Reduce your work hours so that you can spend more time doing the things you love, yet maintain the same lifestyle by drawing an income from a TTR account that will supplement your salary.
Of course, these are only some of the paths available to you. The financial world is a complex one, and only after discussing your individual circumstances and desires with an experienced financial advisor can the ideal road be mapped for you.
Things to consider
concerning your transition to retirement
As with all things financial, it pays to know your limits. It’s important you understand the contribution caps, which determines how much you can contribute to superannuation before tax. There are also rules regulating withdrawing payments, including minimum and maximum limits per year.
Talk to the team at Pride Advice for all the guidance you need during your transition to retirement.
What’s your preservation age?
Your preservation age is set by the Australian government, and it determines the minimum age to which your super must be ‘preserved’. The age varies between 55 and 60, depending on the month and year you were born. This table will help you work out your preservation age.
|Date of birth||Age at which you access your super|
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|From 1 July 1964||60|