Retirement Planning / 21.06.2022
While retirement is a time that many people look forward to, especially if it is only a few years away, it can also be a daunting time if you don’t feel financially prepared.
Retirement planning is a process that is better done earlier rather than later. Your retirement savings and how much income you have coming in will ultimately determine your retirement lifestyle.
Many people go above and beyond to ensure that they’ll attain the quality of life they want in retirement. But you can enjoy retirement the way you’ve always dreamed of with personalised financial planning and a comprehensive retirement plan.
However, retirement planning is easier said than done.
It’s easy to get carried away with life and forget to think about your retirement income especially if retirement is 10+ years away.
But if you don’t plan for retirement now, your options in retirement may be limited.
To avoid making mistakes in your retirement plan and enjoy the dream retirement you deserve, follow our retirement planning checklist below!
#1 – Determine How Much Income You will Need in Retirement
It’s essential to determine your retirement income needs and make plans to ensure that they will be fulfilled. You can do this by looking at the income you receive today and more importantly, analysing what you are spending your money on.
Additionally, a financial planner can help you determine a more accurate number of how much income you may need to live the lifestyle you want in retirement.
Naturally, you wouldn’t want to run out of money in your golden years, so it’s crucial to understand how much your monthly expenses will be. You’ll need to consider how much of it will go to your living expenses and how much can be set aside for other things such as healthcare, travel, and leisure.
#2 – Prepare a Budget and Plan Your Retirement Income Streams
From having an understanding of your retirement expense needs, you must prepare a budget that will help you monitor your retirement income over the years. To do this, you must consider how much money is coming in and how much is going out every month.
Furthermore, it’s important to consider your future income and what this will look like once you reach retirement age. Consider your retirement income options such as:
- Superannuation and an account based pension
- Centrelink and the Australian Government Age Pension
- Any money you have in savings and bank accounts
- Investment income from investment property or other investment assets
#3 – Pay Down Your Debts
Most people plan to pay off all their debts before they reach their retirement however, that isn’t always possible.
It’s important to aim to be paying off your debts in the years leading up to your retirement. This can be done through an effective debt management plan.
Naturally, if you still have debts, this will affect your monthly retirement budgeting. However, if you’re able to pay off your debts in the years leading up to your retirement, you’ll be able to make your retirement income stretch much further.
#4 – Gain Access to Government Benefits and Maximise your Age Pension
As part of your retirement plan, consider how you can gain access to Centrelink benefits – particularly the age pension t supplement your other retirement savings.
If you’re eligible for government benefits during your retirement years, you must take advantage of these incentives.
Retirement Planning Advice from financial advisers can help you understand how to structure your investment and assets to ensure you maximise your age pension entitlements.
#5 – Keep an Eye on Your Investments
Before you retire, it’s a good idea to do a review of your current investments to ensure they are aligned with your goals and financial situation.
Your investments may include:
- Your superannuation account
- An investment property
- A portfolio of shares
Retirement planning strategies can help you adjust your current investments to your retirement plan and ensure that you minimise the negative tax implications of your investments.
For example, investing in super before you retire can help you not only grow your retirement nest egg (ie. super balance), but you can potentially have access to tax deductions.
You can also choose to top up your contributions if you’re self-employed to make your savings grow faster.
Start Your Retirement Plan Today with Personal Financial Advice from TNR Wealth Management
Retirement planning with a financial adviser by your side can help you to get the most out of your retirement years and retirement savings.
Your retirement years must be spent enjoying the fruits of your hard work, whether you’re planning to travel the world, explore your hobbies, or spend time with your family.
TNR Wealth provides top-quality services for retirement planning in Byron Bay. Our financial planner offers tailored financial planning and retirement planning advice to retirees looking to make the most out of their golden years.
Our team of financial consultants will ensure that you’ll get the retirement you deserve with smart retirement planning strategies.
Reach out today and book a complimentary meeting with our financial adviser, Adam Wade. We’d love to work on your financial plan together to secure your future!
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.Read More >>
Preparing for retirement can be a very complex, drawn-out process. But with the right guidance and by starting early in life, you can be confident you will be able to enjoy your dream retirement with peace of mind.
You may be emotionally prepared to retire, but you must also ensure that you are financially ready to face this new chapter of your life.
When considering how you’ll spend your retirement, you’ve probably considered your travel plans, spending more time with family and friends, and the hobbies you will have time for.
But, all of the fun things you plan to do in retirement will be made more enjoyable with financial security and peace of mind.
One opportunity to explore is your eligibility for SAPTO – the seniors and pensioners tax offset.
The SAPTO may be able to minimise the amount of income tax you have to pay. In turn, you can spend more money towards the things you enjoy in retirement or investing for the future to further grow your money.
What is the Seniors and Pensioners Tax Offset (SAPTO)?
The SAPTO is a special tax reduction available for senior Australians who are eligible for the Australian Government age pension (even though they may not have received a pension due to income or assets).
The SAPTO is available upon assessment of your tax return. It is a non-refundable tax offset.
Eligibility for SAPTO
You may be eligible for the seniors and pensioners tax offset (SAPTO) if you’re a senior Australian.
Eligibility for SAPTO requirements is determined by:
1. Your age
You are eligible for SAPTO if you have reached “pension age”. You are eligible if on 30 June 2021, you were 66 years or older.
2. Your residency status
You are required to have held Australian residency for more than 10 years.
3. Your eligibility for the Australian Government age pension
To be eligible for the tax offset, you must:
- have been the recipient of an Australian government pension or allowance
- have been the recipient of a pension, allowance or benefit. from the Department of Veteran’s Affairs
- satisfy the Centrelink age pension age requirement but did not claim the age pension because of the income test or assets test
4. Your and your spouse’s income (results from the income test)
The SAPTO is only available to lower income earners:
- Singles with income below $50,119
- Couples with combined incomes below $83,580 (couples separated due to illness have a combined income limit of $95,198)
There are other certain eligibility requirements that are more complex to claim the tax offset. If you’re still not sure whether you would be able to claim the seniors and pensioners tax offset, talk to our financial adviser at TNR Wealth Management.
How much of a Tax Offset Will You Receive?
If you are eligible for the seniors and pensioners tax offset, the amount you will receive will depend on your rebate income.
Rebate income is your total taxable income (plus fringe benefits amounts, superannuation contributions and your investment/property investment loss).
To receive the maximum SAPTO, your rebate income must be less than the cut-out threshold. If your rebate income is less than the shading-out threshold, you will receive the maximum tax offset.
|Status||Maximum tax offset amount||Shading-out threshold||Cut-out threshold|
|Each partner of a couple||$1,602||$28,974||$41,790|
|Each partner of an illness separated couple||$2,040||$31,279||$47,599|
Retirement Planning in the Northern Rivers
Claiming the SAPTO is a great way to supplement your retirement income. But there are other ways to source income and save on tax during your retirement.
Consider the following:
- Making the most of your superannuation structures
- Structuring your investments for maximum growth and tax-efficiency
- Setting up your retirement income stream based on your personal financial circumstances
- How can you maximise the amount you receive from the Age Pension?
Retirement planning is important for anyone looking to have financial security and enjoy their best life in their golden years.
Every retirement strategy is distinct. This is why it’s critical to have a plan that’s tailored to your personal requirements.
If you’re looking for someone to assist you with your retirement planning in Byron Bay and Lismore, you can rely on TNR Wealth. We are an experienced personal financial advice team, offering expert financial planning services.
Let’s start planning your retirement today!
Contact us on (02) 6621 8544 or fill in our contact form online here.