You’ve worked hard throughout your life and now your thoughts are more often turning to savouring the fruits of your labour. Our role as qualified and experienced, financial planners is to empower your retirement planning decision making so you can do just that.
Please take a moment now to find the answers to three of frequently asked questions about retirement planning and creating financial independence.
Will I have enough to retire?
ASFA, Australia’s leading superannuation association, developed a retirement Standard that provides a breakdown of expenses necessary for couples and individuals to live a comfortable or modest lifestyle in retirement.
The Standard indicates for couples, $68,014 is required each year (from age 67) for a comfortable retired lifestyle, while those who are happy with a modest lifestyle will need $44,034 per year.
For a ‘comfortable’ retirement, that equates to savings of $640,000 for a couple and $545,000 for an individual.
While it can be helpful to use this Standard as a benchmark, there are a number of important questions we ask our clients, including:
Does your definition of ‘comfortable’ match the definitions offered by the Standard?
And, when exactly do you wish to retire?
We take the time to truly understand what retirement means to each individual or couple. This usually involves teasing out what ‘comfortable’ means to you, and if 67 is the retirement age you’ve set or if it’s something quite different.
While some people see themselves travelling the world from age 50 or 55, others know they won’t be ready to retire until much later as they are physically and mentally able to continue working and enjoy the purpose a working life can bring.
Of course, in the absence of work-derived income, you’ll need retirement savings and income streams and the earlier you wish to retire the more you’ll need. Either way, we can help you plan a financially independent retirement, and for those who wish to retire earlier, this article is for you. Please click here.
When will I be eligible for Downsizer super contributions?
Downsizer contributions have been around since 2018, but earlier this year the rules changed regarding age eligibility and the opportunity to make a large one-off superannuation contribution to boost retirement savings.
From January, 2023 if you are 55 years or older (down from age 60) and you sell your home you are eligible to make a once-only $300,000 contribution from the proceeds of the sale of your home.
Importantly, this lump sum contribution will not count towards your contribution cap, or even if your total individual superannuation balance is more than $1.7M. Further, if your home is owned, then sold by two eligible contributors, you can each contribute $300,000 to super!
There are some conditions, including it must be the sale of a conventional home so proceeds from a caravan or houseboat would be ineligible.
Interestingly, while it is called ‘downsizer’ there is no requirement for you to actually ‘downsize’. Nor are you required to make a subsequent home purchase, but if you do, you are free to make any living arrangements you wish.
What is the Retirement planning process?
At Wealth Fundamentals we are known for providing financial leadership for young professionals, business owners and pre-retirees as they prepare for life beyond work.
In addition to our considerable knowledge and experience, we have a four-step process and a clearly defined financial planning model based on seven wealth fundamentals that are applied according to each individual’s circumstances, goals and stage of life.
For our Wealth Fundament clients, you may wish to click the links below to refresh your understanding of our approach, or may we suggest you forward this email to your adult children, family members or friends who may be concerned about their financial future, and please invite them to contact us if we can help.
To recap our Advice Process click here
To read about our 7 Wealth Fundamentals click here
To find out more about financial planning for retirement or to request a meeting, please contact Matt Lane or Alec Winter on 07 3720 1299 or email admin@wealthfundamentals.com.au.
Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only - unless otherwise stated. Wealth Fundamentals strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances. This information is based on our understanding of legislation at the time of writing. Such legislation may be subject to change. This publication cannot be reproduced in any form without the express written consent of the author.