Retirement planning
Ready to retire? Or thinking about retirement? It pays to plan ahead.If you’re ready to retire, or thinking about what your financial position will be like when you retire, we have collated a range of the most frequently asked questions about retirement here:
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| We have developed an interactive retirement modeller to help you work out if you have enough super, and the effects of retiring later or earlier, taking part-time work and more. Catholic Super offers a Pension and Pre-Retirement Pension product and has a dedicated Pension Service Centre that you can contact at any time on 1300 730 327 to discuss your situation. |
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How much income will I need in retirement?
This is one of the most common questions we receive from our members approaching retirement: it all depends on if you want to live a modest or comfortable lifestyle.
As a rough indication, most people need approximately 75% of their pre-retirement income to support them in retirement*. The following questions may help you determine your income needs:
- What is your current net take home income each fortnight (or month) and how much is this as an annual amount?
- Do you want to maintain this income in retirement or do you require something higher or perhaps lower?
- Do you need lump sums of money for things such as holidays, a new car or home renovations?
- The answers to these questions may help you determine the level of income that suits you.
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| * Better than just surviving on the age pension but still only able to afford fairly basic activities | ^ Broad range of leisure and recreational activities and a good standard of living with the purchase of household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment and domestic and occasionally international travel. |
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The figures in each case assume that the retiree(s) own their own home. The figures relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. Websites: ASFA http://www.superannuation.asn.au/resources/retirement-standard/ *ASFA Retirement Living Standard Research September 2011 ( Figures updated quarterly) |
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Do I have enough in my super? How long will it last?
Once you have determined your income needs in retirement, your next question is whether you have enough in super and will it last for your life expectancy?If you're planning to retire at age 65, statistics show that you're likely to live for another 20 years – a woman at age 65 has an average life expectancy of 86 years and for a man at age 65, it is 83 years. (Source: 2007-09 Australian Life Tables published by the Australian Bureau of Statistics)
To assist you in working out whether you have enough superannuation, we have developed a retirement modeller, which will provide you with a guide as to how long your funds will last.
Is there anything I can do now to maximise my savings?
You can increase your superannuation savings in a few ways:- Review your investment options
- Contribute more money into your super
- Take part in a Transition to Retirement strategy
What is a Transition to Retirement strategy?
A Transition to Retirement strategy can be used by anyone over the age of 55. It can be a means of easing into retirement whereby you could finish full-time work but continue part-time and use some of your super to supplement your income, so that you have the same income but work less hours.Alternatively, it can be a means of building up your super for retirement. You could continue to work full-time and direct more salary into super via salary sacrifice to enhance your super, while drawing a tax effective super pension.
A financial planner can give you advice in this area.
For more information about this strategy:
Catholic Super offers a Pre-Retirement Pension to our members, which can be used as part of a Transition to Retirement strategy. Find out more by:
- Visiting the Pre-Retirement Pension page
- Attending a seminar
- Use our retirement modeller
- Call our Pension Service Centre on 1300 730 327
Will I be eligible for any age pension?
Many Australians will be eligible for at least a part-age pension. The amount of pension you will be eligible for is be determined by the amount of assets you have (excluding your home) or the amount of income you earn.Currently ‘age pension’ age for men is 65 and for women it is also 65 unless you were born before 1st January 1949. For both men and woman born on or after 1 July 1952 the age will gradually increase to age 67 - refer to Centrelinks website for more information.
If you are not eligible for the age pension, you may still be eligible for the Commonwealth Seniors Health Card.
If you need more information, you can contact your local Centrelink office.
Am I allowed to continue working in retirement?
Yes, anyone can continue to work during retirement but there are some issues that need to be considered:- If you are of pension age, you need to consider the impact on your age pension. It is important that you keep Centrelink informed in such cases.
- Remember that you may be eligible for a Government co contribution of up to $1,000 - please refer to Super Co-contribution for more information.
- You may want to maintain a small superannuation account for employer contributions and co-contribution entitlements.
How can Catholic Super help?
Catholic Super offers financial and retirement planning services to all members through its wholly owned subsidiary, Catholic Financial Services. Our professionally trained staff are able to provide these services to all Catholic Super members.Read more about getting the right financial advice.
Have a question about retirement that’s not answered here? Contact Us or call our Pension Service Centre on 1300 730 327 (Mon-Fri 9.00am-5.00pm AEST).
* Vanguard Center for Retirement Research
