Got big plans for when you retire? Sort your retirement strategy now
29 May 2016
Whether you dream of hitting the road or living out your retirement dreams closer to home, here are four retirement strategies you could consider to help you get the most out of your super.
1. Put more money in yourself*
There are different ways you can put money into your super account, including:
While this sounds painful, it’s probably one of the easiest ways to grow your super. It’s simple – ask your employer to divert some of your pre-tax salary into your super account every time you get paid. It’s an effective, ongoing means of drip feeding more money into your super account. A 35-year-old earning $60,000 a year with a super balance of $30,000 could be around $100,000 better off at retirement – just by salary sacrificing $20 a week.†
Making one-off contributions from your take-home pay.
After-tax contributions, also known as ‘personal contributions’ can be made on a regular or one-off basis.
2. Combine multiple super accounts into one
If you’ve got several super accounts, you could be throwing money down the drain by paying more fees than you need to. These fees may not seem like much now, but over time they can really add up. Also, it might be easier to keep track of your superannuation if you’ve only got one account.
3. Find lost superannuation
If you’ve had more than one job, moved to a new house or changed your name, you could have lost or unclaimed superannuation. There is around $18** billion worth of lost superannuation in Australia – so it’s well worth finding out if some of it is yours. To do so, you can log into your Suncorp super online portal and use the SuperMatch tool to locate lost super accounts. Alternatively, visit the Australian Tax Office website or speak to your super fund.
4. Consider a transition to retirement strategy
If you've reached your 'preservation age', you may be able to withdraw your super balance as an income stream, even if you're still working. This is known as a transition to retirement strategy, and offers the following benefits:
- It lets you boost your super balance while you’re still working full time, but without reducing your take home pay; or
- It lets you reduce your working hours without reducing your take home pay.
Setting up a transition to retirement strategy may not be right for everyone, and requires expert help – so it’s important that you consult your financial adviser before making any decisions.
A transition to retirement strategy is offered through Suncorp Brighter Super and Suncorp Everyday Super. To learn more about our super accounts, call our experts for a free chat on 1800 207 754, Mon-Fri 8am – 6pm.
* There are limits (sometimes called ‘contribution caps’) on the amounts you can contribute to superannuation in any financial year without penalty. These caps depend on your age – visit the ATO website for more information.
†Assumes the superannuation fund is invested in a balanced option and earns a rate of return (before earnings tax) of 6.30% per year. Earnings are calculated at the end of the financial year. Retirement is at age 65. The figure is in future dollars. Salary, superannuation guarantee and salary sacrifice are indexed annually at 3%. Top up is annualised and contributed at the beginning of the year. This projection is an estimate only. Actual result would be subject to changes in salary, tax treatment, and fluctuations in investment returns.
^Before moving your superannuation you should consider: any fees payable (e.g. for exit or withdrawal), where future employer contributions will be paid; whether current insurance entitlements will be retained or equivalent cover made available; and any other possible impact, e.g. to your investments and tax position.
**As at 30 June 2017
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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product. For Suncorp Everyday Super you should read and consider the Suncorp Everyday Super PDS and Product Guide. For Suncorp Brighter Super, please read and consider the Suncorp Brighter Super Personal Super and Pension PDS or for Suncorp Brighter Super Business Super please read and consider the Suncorp Brighter Super Business Super PDS. Everyday Super, and Brighter Super are part of the Suncorp Master Trust (Fund) (ABN 98 350 952 022, RSE Fund Registration No. R1056655). Suncorp Portfolio Services Limited (Trustee), ABN 61 063 427 958, AFSL 237905, RSE Licence No L0002059 is a related body corporate of Suncorp Group Limited ABN 66 145 290 124. The products referred to are not bank deposits or other liabilities of Suncorp Bank (Suncorp-Metway Limited ABN 66 010 831 722) (SML) and are subject to investment risk including possible delays in repayment and loss of the interest and principal invested. SML is not liable or responsible for, and does not guarantee or otherwise support, Suncorp Everyday Super accounts. SuperRatings Pty Ltd (ABN 95 100 192 283, AFSL 311800)(SuperRatings) does not issue, sell, guarantee or underwrite Suncorp Everyday Super. Go to www.superratings.com.au for details of its ratings criteria.
Before moving your superannuation you should consider: any fees payable (e.g. for exit or withdrawal); where future employer contributions will be paid; whether current insurance entitlements will be retained or equivalent cover made available; and any other possible impact, e.g. to your investments or tax position.