Do I have enough for my retirement?

Written on the 20 November 2023 by Parkside InvestorPlus

Do I have enough to retire on my retirement with my super balance?

As always, the answer is…it depends.

Here’s the deal, research consistently shows that many people do not retire at the exact time of their choosing.

While most of us continue to work towards our future date of retirement, typically, the ‘that day’ just pops up in our mind.

Then we take the leap of faith – knowing (hoping) all will be well.

The big rub here is that many factors can derail your perfect date of retirement.

CoreData’s Best Possible Retirement research, for example, consistently shows that things like retrenchment, ill-health and having to leave the workforce to care for a loved one are quite common spanners in the retirement works.

So, if a reasonable proportion of us can’t even choose the timing of our retirement, it’s anyone’s guess how a super fund is meant to help each of its hundreds of thousands or even millions of members plan or prepare for the day they retire.

Financial Advice

Financial advice or guidance has a significant role to play in making retirement better for more Australians approaching or near retirement.

It’s likely to be an integral part of many super funds’ responses to their Retirement Income Covenant obligations and it could be a valuable component.

The sad truth is that many Australians approaching retirement, or even 10 years out from retirement, are illiterate about their retirement options from a financial standpoint.

Shifting money from an accumulation fund to an account-based pension is a strategy available to fund members, whether they’re in an SMSF or an APRA-regulated fund, provided they meet certain qualifying criteria and, critically, provided they know they can do it.

Unlocking Financial Potential with Transition to Retirement (TTR) Strategy

Transition to Retirement, often abbreviated as TTR, is a powerful financial strategy available to eligible members.

This approach comes with a host of benefits for those who can leverage it effectively.

Essentially, TTR enables individuals who are still employed to establish an account-based pension while continuing to receive contributions from their employer into their superannuation fund.

Additionally, it allows for the possibility of reinvesting pension income as voluntary contributions, thereby giving a significant boost to one's retirement savings.

It's important to note that whether or not you agree with the way tax concessions are applied, these are the established rules, and every Australian has the right to make the most of them.

However, the challenge lies in the fact that many Australians are either unaware of these rules or lack access to proper guidance on how to make the most of them.

Research from Class indicates that those who are least informed tend to be members of APRA-regulated funds.

For financial advisers, TTR strategies are fundamental tools in their arsenal, particularly for Self-Managed Super Fund (SMSF) members who are more likely to receive professional guidance.

ASIC's Money Smart website does offer some basic information on TTR, including tips such as leaving a portion of your funds in an accumulation account to continue receiving contributions and keeping an eye on your transfer balance cap.

However, it's essential to understand that this information is not a substitute for personalized financial advice.

For more personalised  and tailored financial advice for your current circumstances, contact Parkside InvestorPlus on (02) 9899 4899.