Enough To Retire On
Stamp duty exemptions
The amount of stamp duty that needs to be paid when moving to a smaller home or retirement village later in life can often be a barrier to achieving your goal of a contented retirement.
Stamp duty exemptions are granted to first homebuyers and a Parliamentary Inquiry into housing affordability has provided evidence to support the same exemptions being granted to those downsizing from their primary residence. With the Inquiry finding that not only do older Australians still have debt as they reach retirement age, but that the level owed had increased, with mortgage holders owing more than $50,000 increasing to 61% and those owing more than $100,000 has risen massively from 12% to 38%.
With the Inquiry acknowledging that suitable housing is a major factor in the health and wellbeing of older Australians, making it easier for people to choose the right living option for them, and then being able to afford it, is key to supporting an ageing population.
For more information on the Parliamentary Inquiry, visit the
Australian Senate.
How much is enough to retire on?
Those starting to look at potential retirement income scenarios might like to start with a “how much will I need” online calculator.
Two we like are:
AMP
“My retirement simulator” How much super will you need? How long will your funds last?
https://onlineservices.amp.com.au/MyRetirementSimulation/showSimulator
BT Financial Group
Tools and resources – includes government co-contribution calculator
http://www.bt.com.au/investors/tools-and-resources/tools-and-resources.asp
The Centrelink website is a rich resource portal for those who believe social security will provide part of their income. In particular, the Financial Information Service is a great starting point
http://www.centrelink.gov.au/internet/internet.nsf/services/fis.htm
and the overview retirement planning page has links to an excellent retirement rates facts sheet
http://www.centrelink.gov.au/internet/internet.nsf/individuals/ret_index.htm
The National Information Centre on Retirement Investments (NICRI) is also government funded – and features an excellent “money map” utilising calculators to step you through ramifications of decisions to spend or save
http://moneymap.nicri.org.au/
Are you ready to retire quiz
Most Australians enjoy at least a little work in their life-work balance, but how much is enough – and have you done the planning that’s necessary before beginning your transition?
Use our quick 25-questions quiz to check the health of your retirement planning
The holistic approach is good not just for your health and wellbeing, but also when planning for your retirement.
You’re continually being told you need a secure retirement nest egg (say, $1 million). So you decide that, until you have this certain amount, you’re not ready to clock off. While there’s no doubt being financially secure is incredibly important, though, there’s much more to a happy and fulfilling later life than the money.
First and foremost is a sense of choice. Next is independence, with a readiness and willingness to move (rather than be pushed) to the next stage not far behind.
Research confirms that those who plan their transition into retirement are much more likely to create a satisfying life-balance. Sound financial planning is indeed an integral part of the process, but there’s much more to consider than just the dollars.
Take the quiz now!
Financial Planners and Accountants
The Financial Planning Association of Australia has an excellent “find a planner” tool on site allowing you to search by business name or suburb:
http://www.fpa.asn.au/FindaPlanner/
Find an accountant who is also a financial planner here
http://www.cpaaustralia.com.au/apps/finder/fp/showfind.aspx?CPSSessionID=SID-3F57FECA-E89DC129
Allocated annuity
Q. David
I want to cash in the remaining amount of my Allocated Annuity, how would that affect my pension?
A. Provided by Dante De Gori, Technical Manager - Business Support, ClearView Retirement Solutions & MBF Life Limited
The rule with Centrelink is that unless they are notified otherwise, any commutation (lump sum withdrawal) will be treated as additional income from their allocated annuity/pension and therefore affect the income test for the Age Pension.
If you notify Centrelink that it is a Lump Sum withdrawal then it will not be treated as income but rather the treatment will depending on what the client does with the money. For example if they place it into their bank account then the value of that bank account will be assessable under the assets test and then deemed under the income test.
Simpler retirement planning
For many people, retirement entails significant lifestyle and financial changes. Planning for it, however, can be a difficult and time-consuming process. To help you start, ClearView Retirement Solutions has created a range of free online financial tools.
These calculators help you understand how much you’ll need in retirement and to plan for the future in just a few minutes. Calculators range from a simple budget planner for determining your current cost of living, to a tool for estimating your superannuation entitlements at retirement.
Planning is an important part of good financial management. Taking steps to control your finances today could make a long-term difference to your savings and investments. But planning for retirement can seem daunting. These free online financial tools and calculators have been designed to assist you to better understand your present financial situation and plan for the future. In just a few minutes you could better understand your present financial situation and identify what to do next.
ClearView’s calculators include:
- Budget planner – This simple tool is useful for determining your current cost of living while helping you decide how much you can save.
- Income in retirement calculator – This tool helps you to estimate your income requirements during retirement. As a rough guide, you should target a retirement income of 50–70% of your pre-retirement salary. This is because many costs you would incur normally would no longer apply.
- Capital investment monitor – Want to know how much you’ll have to invest at retirement? This simple tool helps calculate your total wealth (such as superannuation payout, savings, and sales proceeds) less major expenditures such as renovations, motor vehicle purchases and overseas trips.
- Superannuation estimator – This calculator allows you to see how much your superannuation benefits may be worth at retirement and how much you could need to save to reach your desired level of income.
- Money longevity time line – This simple calculator provides a projection of how long your savings could last in retirement based upon your weekly income needs.
- Estate planner – A useful tool if you are near retirement. It helps you to determine how much money you can receive during retirement while providing for dependants or family.
- Salary sacrifice comparison – This calculator enables you to compare the difference between salary sacrifice versus post tax contributions into superannuation.
Taking steps to help control your finances today could make a long-term difference to your savings and investments. To start using the calculators, simply go to the ClearView website at www.clearview.com.au
Any advice in this material is general advice only and does not take into account your individual objectives, financial situation or needs. Before acting on it you should consider the appropriateness of it taking into account your personal circumstances.
More on Superannuation
Our Superannuation page has a lot more information.
