Get confident about your retirement
12 January 2021
If you’re planning your retirement and are worried about your finances you’re not alone. For many people nearing retirement money is one of their biggest concerns. Thinking about questions like - do I have enough to afford the lifestyle I want in retirement, will I ever get out of debt and what if my money runs out before I do can cause a great deal of stress.
What last year threw our way with market volatility, low interest and fluctuating super returns, can also add to this worry and for some can make retirement seem impossible.
You can worry less
You can get answers to these concerning questions and reduce your worries about money with advice.
Research shows that people who receive financial advice that’s right for their needs and take action on the advice worry less1. For a number of people surveyed receiving advice on their retirement income and finances meant they no longer worried at all1.
Also, despite common misconceptions, advice can be helpful no matter how much you have in your retirement savings kitty, as was the case with Jack and Dianne.
Jack and Dianne, both 65, were hoping to retire in a couple years, but they were worried the $250,000 they had in super wouldn’t be enough.
For the first 10-15 years of their retirement, while they’re still active, they want to have enough income to enjoy weekends fishing on Straddie and be able to take the grandkids out for dinner or to a theme park on special occasions and not be afraid of them visiting and eating them out of house and home.
After a suggestion from a friend Jack and Dianne decided to speak to a financial advisor.
The advisor explained how income in retirement works and that Jack and Dianne could supplement their Age Pension with income from a superannuation Income account when they retire.
The advisor explained the Age Pension and how with their assets and income Jack and Dianne would be eligible for the full Age Pension (including the energy supplement) when they retire, currently $37,000 a year for a couple.
The advisor also explained how a superannuation Income account works and showed Jack and Dianne how, for example, a draw down rate from their super of 6% could give them an additional $15,000 per year to support the lifestyle they’re seeking in retirement.
Overall, the advisor showed Jack and Dianne they could start their retirement with a combined income of $52,000 per year, enough for them to enjoy the retirement they’re after.
Jack and Dianne would continue to meet with their advisor annually in retirement to review their income and how long their retirement savings would last based on current investment returns, their chosen draw down rate and their expected expenses.
Their advisor also provided useful budgeting tips and information on salary sacrifice to help them maximise their retirement savings over the coming years ahead of their retirement.
We can help you
If you’re looking for assistance on managing your funds for retirement, we can help. As a BUSSQ member you have access to personal financial advice on contributions and retirement at no extra cost*. BUSSQ members also have access to tailored retirement advice which is charged on a fee for service basis^. Find out more or call us on 1800 692 877.
If retirement is on your radar BUSSQ has a range of Income account products to suit your needs. Whether you're transitioning to retirement or ready to fully retire we can provide a flexible solution for you. Read more.
This case study is for illustration purposes based only on the Age Pension and superannuation not taking into account other assets/income and calculated using MoneySmart retirement planner calculator (moneysmart.gov.au). It assumes the couple: own their home and remain in it; retire at 67 and invest $125,000 each in an Income account invested 100% in balanced growth earning 6.5% p.a. before fees and taxes with an investment fee of 1.01% p.a. until age 85; meet full Age Pension eligibility criteria as at 10/11/20 until aged 85. All calculations in today’s dollars with inflation of 3.5% p.a.
1. Retirement income worry: Who worries and why? National Seniors and Challenger January 2020.
*Personal advice is limited to BUSSQ products and is advice on insurance, investment choice, contributions and retirement. The cost of this advice is included in the BUSSQ Trustee related costs. ^Tailored retirement advice is advice on retirement income streams and transition to retirement. As this advice extends beyond a member’s BUSSQ super account it is billed on a per hour basis. Advice is provided by Link Advice Pty Ltd (ABN 36 105 811 836 AFSL 258145).
This information is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Before acting, you should review the relevant Product Disclosure Statement to ensure you have all the information about the BUSSQ product and how it works and consider the appropriateness of the information to your needs or seek independent advice from a properly qualified professional. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201).
This webpage provides general information only and does not take into account your personal financial situation or needs. Before acting, you should review the Product Disclosure Statement to ensure you have all the information about the relevant BUSSQ product and how it works and consider the appropriateness of the information to your needs or obtain financial advice tailored for your personal circumstances. A Target Market Determination (TMD) document shows the target market of consumers that a product is designed for and can be viewed on our TMD page.