You’ve worked hard to build your wealth. Now, it’s time to ensure it lasts for your retirement and beyond.
Have you thought about how you’ll continue to grow your wealth when you’re no longer working? How about what you’ll do to occupy your days during your post-work life? These are all big picture conversations our team have daily with clients.
Successful retirement planning is all about superannuation. Specifically, the steps you take to optimise it today. Think of optimising your super as a way to maximise your savings. Imagine your superannuation as a pot that requires careful tending to ensure it’s full when you need it most. With proper attention, you can ensure it’s flourishing by the time you’re ready to retire.
Here are three straightforward ways optimise your superannuation for your dream retirement.
Step 1 | Consider additional superannuation contributions
Many pre-retirees we meet are financially well-off. Their children have moved out, and the mortgage is paid off. On paper, it looks like they’re living the dream.
While they’ve worked hard and are now enjoying the rewards, the same question appears time and again: “are we going to be okay?”.
What they’re really asking about is longevity. About sustainability. About having enough.
It’s normal for spending to turn into splurging during the first few years of retirement. If left unchecked is where problems arise. That’s where superannuation contributions are so valuable.
If you haven’t already, take the time to meet with a financial adviser to assess your current situation. A certified fiduciary adviser can help you create a plan to redirect any extra funds into your superannuation account, balancing your short-term desires with long-term goals.
For instance, consider your work bonus. Redirecting this bonus into your superannuation instead of spending it on immediate wants or needs might be beneficial. You likely won’t even miss the difference.
Alternatively, you can try salary sacrificing. This means you agree with your employer to put some of your pre-tax salary into your superannuation fund. Even a small amount can make a big difference over time.
It’s possible to enjoy yourself while ensuring that your hard-earned wealth works for you.
Step 2 | Is your superannuation well managed?
It’s important to not only grow your superannuation savings but also to ensure it is actively managed and nurtured over time.
Are you regularly monitoring your superannuation to align with your long-term financial goals? Or better still, would you rather experts do this for you?
Effective management of your superannuation entails several strategies to keep it strong and ensure steady growth. Diversification is key; this means spreading your investments across different asset classes, such as stocks, bonds, real estate, and cash equivalents. By doing so, you can minimise the risk of your entire portfolio being adversely affected by one underperforming investment.
In addition to diversification, it’s essential to conduct regular reviews and make adjustments to your investment strategy. This practice helps keep your superannuation aligned with your financial objectives and adaptable to changes in the market. Think of it like caring for a garden: you need to tend to it regularly for it to thrive, rather than just planting seeds and hoping for the best.
Whether you’re managing your superannuation yourself or using an industry super fund, seeking a second opinion from an expert can be invaluable. Confirm that you’re on the right path. By taking a proactive approach to managing your superannuation, you can secure financial stability for your retirement and leave a legacy for your loved ones.
Step 3 | How to effectively draw from your superannuation fund
Now that you’ve managed and grown your superannuation, what’s next? The final step is about how to draw from your super effectively.
One strategy could be to move your superannuation to a pension fund. This can help you pay no tax on your super income once you reach 60, keeping more money in your pocket while having the flexibility to access funds when needed.
Think of this pension fund like a pot with a tap at the bottom: It can provide a steady stream of water, representing your account-based pension that drip-feeds funds throughout your retirement. If you need funds quickly, you have the flexibility to tip the pot over for a faster flow, representing your lump sum withdrawals. This can be easily managed through this pension fund.
However, this is a significant decision that should be carefully considered. Seek professional advice when needed. Financial advisers can provide personalised advice based on your circumstances, helping you make the best choice for your future.
By planning ahead and consulting with experts, you can ensure your retirement savings continue to grow and remain protected, so that you can sleep well and live your best post work life.
Guidance is always available. It’s never too late or early to have a life changing conversation about your finances.
This new stage in life can be your opportunity to focus on personal goals, hobbies, and travel that have been sidelined due to work commitments. You can also begin to build a strong legacy for your loved ones by strategically optimising your superannuation, unlocking these new opportunities.
Remember, you’ve worked hard for your money, and now it’s time to let it work for you.
If you need support getting on track for your dream retirement don’t hesitate to contact our team for a complementary chat. Additionally, you can subscribe to our mailing list to receive valuable insights about all things finance, lifestyle and wealth planning.
