Have you ever wondered what your super is actually going to give you once you decide to stop working? When is it going to run out? Will there be any left for the kids? Here, we use the ASFA “Will My Super Savings Be Enough” calculator to show you how you can determine:
When can I access my super?
How much income will it give me?
How long will it last?
Our calculator is great at anticipating that you might want to slow down a little at some point, or take work breaks, for whatever reason. To show this flexibility, we’ve incorporated a desire to work less in our 50’s, and see what impact this is going to have on our ability to accumulate enough passive income for later.
Here’s our scenario:
We’ve then assumed:
…and played around with some assumptions that you can tailor to your situation:
The result is a significant shortfall, and heavy reliance on the Age Pension being available when I hit 64…
For more information, plug your own details into the calculator, and give us a call if you need to accelerate your strategy.
Remember, we’re experts at finding tax savings to boost your bottom line, now and down the track!
Are you too young and busy to know whether you even WANT to retire yet, let alone when and how? Like most 30 and 40-somethings, have you filed superannuation in the too hard basket? Because who knows what you’ll be doing in 5 years, let alone 20 or 30?
Well, forget retirement for a minute. Just think of your Super as your future “passive, tax free income” to draw on fully, or partially, to fund your lifestyle when you want to take the pressure off.
When you let yourself think that far ahead, you’ll likely ask yourself:
When can I access the money?
How much income will it give me?
How long will it last?
Before you even get there, you may need to figure out how much income you’re going to need. If you’ve got no idea how much you spend now, let alone what you’ll need then, the Association of Superannuation Funds of Australia (ASFA) can give you some guidance. For example, they say the average couple in Canberra will need around $58,000 in today’s dollars to live a “comfortable” retirement that includes occasional overseas holidays, a reasonable car, health insurance and the like. Here’s how they break it down:
You can look at other states and options here, and likely figure out just how far you are from “average” from a quick skim of these figures:
Then, head over to the “Will My Super Savings Be Enough Calculator”, to work out how long your money is going to last you (and how dependent you might be on the government providing an Age Pension by the time you get there!). We’ve done a case study if you want to check out how to use the Calculator…
Long and the short is, as you get closer to the magical figure of 60 (it’s earlier for some, so make sure you know your dates) the more critical it is to take control and maximise how much is in your Fund to give you the lifestyle you’re after. Thing is, the earlier you do it, the more freedom you’ll have! (more…)
This idea came from Fred, who’s 75 going on 25 by the way! A career entrepreneur, his passion and energy isn’t slowing any time soon! Neither too are his ideas for leaving his family well prepared for the future, especially his grandchildren.
Fred spent his lifetime building businesses, which like many people has had its fair share of boom and bust successes and failures. But he credits his father’s early advice on savings for where he is today. Fred has well in excess of $2m to fund every last lifestyle wish and medical requirement, so “comfortable” is how he describes his financial position.
And so it was mid last year, having been one of the first to entrust Greenlight to manage his SMSF pension accounts, he asked the question
“Why couldn’t I set up multiple bank and trading accounts in my SMSF, and let my grandchildren manage some of their inheritance today? It would give me an avenue and a vehicle to teach them what I can see they need to be taught – patience, responsibility and accountability.”
Fred wishes he’d taught his own children more, but like most Father’s was busy… And his focus was on ensuring he could provide his kids with the best education, great holidays, a nice house and yard, the list goes on.
But with more time now, and opportunity to reflect on changes in today’s pace of life, he’s desperate to spend time with his grandchildren, teaching them the things he most valued about his own upbringing.
And the idea seriously got the attention of the whole extended family!
How it works:
Fred’s 100% in retirement, and all of his super monies are fully accessible, tax free.
He can spend unlimited amounts (though this strategy might be reigned in slightly for people trying to access the Seniors Card post 1/1/15 after Budget Announcements!)
He can’t contribute any more to super, so the kids have to work within the constraints of holding money in shares vs cash (incl Term Deposits), and expenditure
Fred can monitor every transaction through Greenlight Online using datafeeds provided by the bank and trading accounts
Greenlight’s fees are fixed, so any increase in trading activity has no impact on Fred’s costs
Fred retains 100% actual control of the money within his SMSF
And almost a year on, the scoreboard has become somewhat of a family talking point – OK, competition! Each of the 5 grandchildren, ages ranging 16 to 28, started with $25,000 in cash on 1st August 2013. The total values range from $29,336 to $18,943. Only 1 grandchild has spent any of the money, while the rest are largely focused on cash rates and sharemarket movements. Most interesting is that 2 of the grandchildren in particular, have taken a FAR greater interest in both their super and saving than they have ever indicated before, so it’s been the start of something pretty amazing.
Talk to us more about their progress, or setting up your own arrangements for children or grandchildren. Though every family is different, and there’s some tips and traps to be mindful of, something like this, might just work for you too!
