Retiring in Comfort

Superannuation for Lifestyle | Hints & Tips | Equity Release Mortgages or Reverse Mortgages | Self Managed Superannuation | Retrenchment or Voluntary Redundancy

Planning to ‘live’ in Retirement

old coupleFew people can live ‘comfortably’ on the Centrelink aged pension after retirement.

A generation of retirees born before WW2 have in the main been able to survive on the aged pension, however the aged pension has not kept pace with the rising cost of living.

95% of the next generation are grossly under funded for retirement with many entering retirement with debt. We all hope our economy can afford to continue to pay the aged pension to this much larger group of people.

Accord Financial Strategies aim is to encourage as many people as possible to move from the 95% to the 5%. It does not have to be a daunting task – it is never too late to start.

A few hints & tips

  • Retirement is a financial and lifestyle goal – it has nothing to do with age.
  • It is possible to receive a household income in retirement of $40,000+ p.a. without paying income tax.
  • Consider the percentage of your wealth tied up in assets not generating income, or worse, costing you income to keep.
  • Work part-time and access income from your super to all but eliminate income tax on your salary.
  • Negatively geared investments at retirement – time to bail out of those!
  • Restructure your investments over a number of tax years to minimise the impact of capital gains.
  • If you’re considering retirement within 10 years, we suggest you talk to a financial planner now!

Extra Income for retiree living expenses

Equity Release Mortgages or Reverse Mortgages are becoming popular for clients who are asset rich and cash poor. These type of loans are starting to be heavily marketed by financial institutions.

Please be careful – independent advice from a professional adviser is essential before entering into any of these loan contracts.

Contact us now for a no obligation interview for advice on planning for your retirement lifestyle.

Case Study

Spring Cleaning

Graham & Judy, an elderly couple, have lived for 20 years in a property close to the city with a market value of $600,000. They are on the full aged pension, love living where they are, but struggle even to pay the council rates. The kitchen, laundry & roof are all in need of a serious makeover. Rob’s friend is a real estate agent and has suggested a nice little home unit on the other side of town.

Some important considerations:

  • They are happy where they are for a few more years with most of their friends in this area.
  • Selling the house would give them a cash windfall, and enable them to live more comfortably.
  • Selling houses costs money and the thought of packing & moving is quite stressful.
  • Utilising an equity release loan to upgrade their property will add value to the property, provide additional income in future years to cover house expenses, and save the costs & stress associated with selling and moving.

In this example we would suggest it may be in Graham & Judy’s best interests to consider tapping into the equity in their property in advance of selling in a few years time.

The above example of advice is not suitable in all situations.
Please contact us to discuss the various options available in an obligation free interview.

Self-Managed Superannuation (SMSF) – a saviour or a slave?

SMSF’s are without question the fastest growth area in the superannuation arena, but they can be an administrative nightmare!

Also the penalties imposed by the Tax Office for getting it wrong are substantial so be careful. Accord Financial Strategies, working with it’s partners, provide a dedicated Self-Managed Superannuation Service covering Investment, Audit and Tax reporting to the Australian Tax Office, so that you are in total control of your superannuation and can find the best way for your investment to work for you.

An SMSF is a worthwhile option for people:

  • who have a passion for total control of their assets
  • who are well educated in investing and are keen to make day-to-day investment decisions
  • who have in excess of $300,000 in super assets and are prepared to share some of the administration functions in exchange for some cost savings
  • who prefer to own real estate directly in their superannuation fund
  • who have a need for a larger range of investments than offered through public super funds.

There are however a number of other factors to consider.

Contact us if you would like a no obligation interview to assess the opportunities.

Retrenchment or Voluntary Redundancy – A new opportunity!

If you have received a redundancy payment, there are many things to consider.

  • Over 20% of redundancy payments checked by our office contain significant errors – it is important to ensure yours has been calculated correctly.
  • Have you received advice regarding your superannuation entitlement?
  • Billions of dollars remain uncollected in industry superannuation and will be given to the government if not claimed.
  • If you have had life insurance through superannuation, has that cover continued?
  • Are there costs associated with changing superannuation?
  • Can the tax payable on the redundancy payment be reduced?
  • Can you qualify for a Centrelink benefit?

Our staff are fully versed in the structures required to maximise Centrelink benefits and tax savings.

Contact us for an obligation free interview if you are considering a redundancy offer. Time is often limited when these offers come through, so call us sooner rather than later!