RSM Australia

Retirement planning

How much is enough?

Working out how much you will need to fulfil your dreams for a ‘comfortable’ retirement is something very unique and personal to you.

The Association of Superannuation Funds Australia (ASFA) released a report in June 2014 indicating that about $42,433 a year (for a single) and $58,128 a year (for a couple) would provide a ‘Comfortable’ standard of living in retirement. Is that comfortable to you? What does this means in terms of total retirement assets? 

According to ASFA to achieve a Comfortable standard of living in retirement you could need about $510,000 as a couple, including the receipt of a part Aged Pension, to achieve this. So as part of your retirement planning you may wish to consider the following questions:

  • what would you consider a comfortable income in retirement?
  • when do you want to retire?
  • how much you need?
  • do you have enough?

Retirement planning, at its simplest, is about successfully tailoring and managing your ‘wealth creation' and 'income and asset management’ plan to meet with your idea of a ‘comfortable’ standard of living in retirement.

Retirement planning is divided into two key areas:

  • pre-retirement planning – focussed on wealth accumulation, asset protection and debt reduction.
  • retirement planning – focussed on managing your asset wealth to see you through your retirement and potentially to structure this efficiently to fit with your succession and estate plans.

Pre-retirement planning – wealth accumulation 

The decisions you make on your journey to retirement will impact how well prepared you are going to be when you ultimately decide to leave the workforce.

Studies have indicated that only 53% of couples and 22% of singles are on track to achieve a comfortable retirement income.

What you may not realise is that retirement plans are not just about how much you have in ‘Superannuation’, although this is important. Other parts of your Financial Plan can be just as important if not more. Are you on track to repay your loans? Are you appropriately insured (Risk Management) should a serious event sideline you or your spouse earlier than expected? Are your other assets working to deliver the investment returns you need? 

The key planning areas to quality ‘pre-retirement planning’ include:

  • risk management – insurances to protect your assets, yourself and your family
  • debt management – appropriate and tax efficient plans to repay loans
  • wealth accumulation – growing your assets both inside and outside superannuation
  • succession planning – how you intend to realise value and wealth from your personal or family businesses

Ensuring that your retirement goals are realistic and on track is vital and something that should not be left until the last minute. Even a ten year window can be too short a time to make up a Retirement Shortfall. Each financial decision you make, or put off, could significantly impact how comfortable you are in retirement.

What should you do? 

The best course of action is to speak with us to review your current financial plans and goals to determine exactly where you currently are. Together we can then work together to make appropriate changes incrementally to get you back on track or to enhance the outcome for you.  That will give you great comfort.

Retirement planning – longevity 

Could you outlive your money?

The concern around outliving your money (longevity risk) has been magnified by recent investment market events and continued uncertainty.

A 2009 and then 2010 review by the Federal Government both highlighted the issue that many Australians could outlive the retirement nest eggs. Therefore if your approaching retirement, or seriously concerned about how this may impact you in the future, pre-retirement planning is imperative to help to mitigate, or at least reduce, this risk.

About to commence retirement?

If you are about to commence retirement or already in retirement, your additional funding options have now more than likely been exhausted.  The focus therefore is about managing your financial position moving forward. This is termed ‘Longevity’. 

Managing your financial position in retirement can be impacted by a number of key factors including:

  • your family circumstances (e.g. adult children moving back in)
  • financial markets, investment returns and investment risk
  • your standard (cost) of living
  • available government assistance (Centrelink and social services)
  • yours and/or your partners health
  • estate (wealth transfer) plans

You circumstances goals and ultimate idea of a 'comfortable’ retirement lifestyle is unique to you. Therefore so too are your requirement for financial advice and financial management in retirement.

To address your concerns about your retirement longevity and outliving your money is imperative to ask yourself the above questions and then contact us to discuss your answers.

RSM Retirement Planning Services

RSM can offer you a personalised service to meet with all your financial planning needs. RSM has consultants around Australia specialised in the following areas:

  • superannuation and retirement income
  • self-managed superannuation
  • wealth creation and portfolio management
  • risk management – personal and business insurance
  • estate and succession planning
  • untaxed super funds
  • aged care planning

Untaxed (Constitutionally Protected) Funds

RSM can offer you access to a team of highly skilled and experienced professionals whom can provide you with assistance and advice in regard to matters relating to your Untaxed Super Funds. Some of these include:

  • GESB West State Super
  • GESB Gold State Super
  • SuperSA TripleS
  • Commonwealth Superannuation Scheme – CSS

Personal Financial Advice Services is provided by RSM Financial Services Australia Pty Ltd (AFSL 238282)

Everyone’s circumstances are different and this website doesn’t take into account your personal circumstance, it is therefore important that you consider the above in light of your financial situation, needs and objects, and seek financial advice before implementing a strategy.

De facto relationships and your super

It’s a fact that many people are living in longer-term de facto relationships than in the past. Longer engagements, second marriages and older couples forming relationships in their golden years are all contributing to this trend.

Avoiding a Will dispute

One of the most difficult issues facing parents is how to treat their non-farming children fairly, whilst at the same time leaving the valuable farm to the farming child or children. 

Why young Australians need to engage with super earlier

It’s common that many young Australians consider super and retirement as something they will deal with when they get older, with some delaying their interest and engagement for their ’50 something-year-old’ self to deal with.

The 3 Myths we are sold about the benefits of low-interest rates for Australians.

We all love the thought of low-interest rates generally because for us consumers it effectively lowers the cost of our monthly loan repayments. But what if what you gained on the front end, you were losing on the backend?

Rethinking the value of Transition to Retirement (TTR) pensions

A Transition to Retirement (TTR) Pension still offers a number of benefits to you as an investor preparing for retirement. Despite the changes to the tax free earning status of a TTR, you shouldn’t be too hasty in discounting this option as it can form a central part of a bigger retirement accumulation strategy.

Victorian farm stamp duty savings

A significant part of any farm succession plan is planning for retirement. Given ever-increasing farm, living and education cost, most farming enterprises will only support one child and their family of the succeeding generation.

Farm Succession - How to Generate Income When Retiring From Your Farm

One question I am often asked by my farming clients when considering farm succession is...

Transfer balance cap reporting

The introduction of the $1.6m cap on pension accounts will result in additional reporting requirements to the ATO by SMSF trustees.  All SMSF’s that are paying retirement pensions to their members will be required to report these to the ATO, even if the total balance of the members pension is less than $1.6m.

5 superannuation tips to check before June 30

With 30 June fast approaching now is the time for you to take action on the superannuation reforms and other general end of financial year issues with these five superannuation tips.   Are you ready?

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Everyone’s circumstances are different and as this website doesn’t take into account your personal circumstance, it is therefore important that you consider the above in light of your financial situation, needs and objects, and seek financial advice before implementing a strategy.
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