When retirement is on the horizon, things often start to get a bit easier financially. Your mortgage might be paid off or almost paid off, and you have no more school fees to worry about. Plus, if you’re earning a healthy income, it’s the perfect opportunity to ramp up your savings for the future.
But, as most of us are all too aware, women often end up with less in their super accounts compared to men, and on top of that, they tend to live longer. These factors can really mess up your retirement plans.
Here’s some helpful tips that can assist you ladies in your 50s and 60s to bridge the gap and ensure a brighter retirement ahead:
Pump up those super contributions: If you’ve got some extra savings, why not give your super a boost before you retire? You can do so by arranging with your employer to make salary sacrifice contributions or even claiming a tax deduction for your personal contributions (up to the $27,500 limit including super guarantee). That way, you not only increase your super balance but also save on income tax. There might also be unused cap space from previous years that lets you put in even more money!
If you’re already maxed out on the cap for concessional contributions or your taxable income is too low for them to make a tax difference, no worries! You can also think about adding in a non-concessional contribution instead. Non-concessional contributions are the ones you make from your own savings without claiming a tax deduction. Right now, the general cap for this type of contribution is set at $110,000, but you might be able to put in more using the bring-forward rule.
Consider a transition-to-retirement strategy: Ever heard of a TTR pension? It’s like dipping your toes into the retirement waters while still working. You can take out up to 10% of your pension balance each year, tax-free (unless you’re in an untaxed super fund). Use this tax-free income to increase your concessional contributions to super and watch your super grow.
If divorce or separation comes your way: It can be a tough time emotionally, but don’t forget to sort out your finances. Super is a major asset, and you don’t want to compromise on your settlement just for the sake of peace. Get some legal help and make sure you get your fair share.
Teamwork with your partner: For couples, the super system lets you contribute to each other’s accounts, and you can even transfer contributions from one account to the other. It’s a smart move if one partner’s super balance needs a boost. Plus, there are tax offsets available to your spouse if you earn less than $40,000 pa, or vice versa.
Super fund check: Nobody wants a lousy super fund, especially right before retirement. So, make sure your fund’s fees are reasonable, and it’s performing well. Check out some online comparison tools or ask a Financial Adviser for help in comparing your options.
Crunch the numbers: You can’t plan without knowing where you stand. Use a retirement calculator to see where you’re at. It’s not a guarantee, but it’ll give you a good idea of your situation. That can help you decide if you are on track or if you need to make some changes to meet your goals.
Consider working a bit longer: If you’re in good health, working part-time or casually for a bit longer can ease the pressure on your retirement savings. And you can still access your super after 60, or even if you’re 65 and still working. Plus, you might still qualify for the Age Pension if your income and assets are below the limits.
So, there you have it! Follow these handy tips, and you’ll be on the road to a more secure and comfortable retirement.
And of course, if you would like professional advice to ensure that you are making the most of these pre-retirement strategies, I would love to help you reach your retirement goals.
This is intended to be general advice only. Goldsborough Financial Services has not taken into account the objectives, financial circumstances or investment needs of any particular person. For specific advice on your situation please contact your Goldsborough Financial Planner.