Superannuation is a crucial part of retirement planning in Australia. A strong super account can provide a significant source of income during retirement, allowing seniors to maintain their lifestyle and enjoy their golden years. However, getting there requires careful planning and management.
Here are some tips to reinforce your superannuation account and increase your contributions as you approach retirement.
Understand your superannuation account
Understanding your superfund means knowing how much you have saved, where your money is invested, and what fees you are paying. Take the time to review your superannuation account statement and understand the details. If you have multiple supers, consider consolidating them to reduce fees and simplify your management.
Increase your contributions
One of the most effective ways to increase your superannuation account is to add more contributions. You can do this by salary-sacrificing a portion of your pre-tax income into your super account; instead of receiving your entire net salary in your bank account, a portion is diverted to your superannuation account. This is a tax-effective way to boost your super account and can help you save more for retirement.
Some people may ask what if they can put employer bonuses as salary sacrifice. It can work as long as they do not break contribution limits.
In fact, recent developments may give better impetus to increase the contributions. Duncan Hughes of the Australian Financial Review said a government plan to increase super caps by 1 July 2023 from $1.7m to $1.9m is a potential window, due to 7.8 per cent increase in inflation.
Make additional contributions
In addition to salary sacrificing, you can also put in your superannuation account through after-tax contributions, which can be made from your take-home pay. You can also make contributions on behalf of your spouse, which can help to increase your combined super balance.
Take advantage of government co-contributions
The Australian government offers a co-contribution scheme for low to middle-income earners. If you earn less than a certain threshold and make after-tax contributions to your superannuation account, the government will match a portion of your contributions. This can be an excellent way to boost your super account without having to sacrifice a significant amount of your income.
Invest in a superannuation fund
Investing in a superannuation fund can provide you with access to a range of investment options, including shares, property, and cash. This can help you diversify your investments and potentially earn a higher return on your super savings. When choosing a superannuation fund, look for one with low fees, strong performance, and a good track record.
Investment strategy review
Your investment strategy should be reviewed regularly to ensure that it is aligned with your retirement goals and risk tolerance. This means understanding the level of risk you are comfortable taking and choosing investments that reflect this. It also means rebalancing your portfolio regularly to ensure that your investments are performing as expected.
Keep track of your superannuation account
It is essential to keep track of your superannuation account and monitor its performance regularly. This means checking your super account statement regularly and ensuring that your contributions are being credited correctly. If you notice any discrepancies, be sure to contact your superannuation fund and have the issue resolved.
Take advantage of transition to retirement
If you are approaching retirement age, you may be eligible for a transition to retirement strategy. This strategy allows you to access your superannuation account while you are still working and can help you to reduce your working hours or take a less stressful job. This can be an excellent way to ease into retirement and ensure you have enough income to support yourself during the changeover.
Understand the impact of taxes on your superannuation
Taxes can have a significant impact on your superannuation account, both during your working years and in retirement. Understanding the tax implications of your superannuation account, especially when reviewed by an accountant licensed to handle tax and super issues, can help you to make better decisions about your contributions, investments, and retirement income streams.
Review your cover
Many superannuation funds offer insurance cover to their members, including life insurance, total and permanent disability insurance, and income protection insurance. Review your insurance cover regularly to ensure that it meets your needs and is appropriate for your stage of life.
Be aware of the costs
Superannuation fees and charges can eat into your retirement savings, so it is essential to be aware of the costs of your superannuation account. Look for a superannuation fund with low fees and charges, and review your fees regularly to ensure that you are getting value for money.
Consider the impact of inflation
Inflation can erode the value of your retirement savings over time, so it is essential to consider the impact of inflation when planning for retirement. This means choosing investments that can keep pace with inflation and ensuring that your retirement income streams are indexed to keep up with the rising cost of living.
Don’t neglect your other retirement assets
While superannuation is an essential part of retirement planning, it is not the only asset you should consider. Other retirement assets, such as property, shares, and savings, can also provide a source of income during retirement. Be sure to review your overall retirement assets regularly and make adjustments as needed to ensure that you have a well-rounded retirement plan.
Seek professional advice on your superannuation
If you are unsure about how to reinforce your superannuation account or have specific questions about retirement planning, seek professional advice. A financial adviser can help you understand your superannuation options and develop a plan to achieve your retirement goals.
The ASAG Reverse Mortgage
Reinforcing your superannuation account is a vital part of Retirement Planning in Australia. With careful planning and management, you can create a robust retirement plan that provides a reliable source of income and allows you to live the retirement you deserve.
The ASAG Reverse Mortgage can serve as a means to supplement your retirement income, tailored specifically for homeowners who are 60 years or older. This loan allows retirees to tap into the equity they have built up in their home, without having to sell their property, and redirect those funds towards their retirement finances.
At ASAG, we can provide you with comprehensive information on our reverse mortgage, including how the loan operates. To explore your options for an equity release facility, please don’t hesitate to reach out to us at 1300 002 724 or info@asagfirst.com.au, or request a product guide.