2020: 5 Super Rules for Retirement Savings

  • Dec 31, 2019 AEDT
  • Team Kalkine
2020: 5 Super Rules for Retirement Savings

 

Ageing of a human being is one of the many universal truths, however, not every individual is able to endure through life enjoying similar financial stability. When an individual is young, he has physical as well as mental energy and strength for making efforts towards securing himself financially. In life, there comes a stage where the individual can no longer work and chooses to leave the workforce behind permanently. In Australia, this Age Pension age is increasing from 65 to 67 years and has been slowly increasing by 6 months every 2 years until Age Pension age is 67 on 1 July 2023.

The pension benefit is one of the perks under which an individual receives a certain amount may be in a fixed interval of time upon retirement. Other than this, there are investment schemes by the government as well as private players for the individuals that provide retirement benefits to the individuals.

A wide range of assistance services and guidelines are provided by the Australian Government and related bodies like the Department of Human Services, ASIC’s MoneySmart, Department of Social Services etc. Here, we shall learn about the five rules for retirement savings that would likely help to maintain financial stability through your retirement.

Various sources for your retirement income may include:

·         Income from super

·         Investments outside super

·         Age Pension

·         Reverse mortgages and home reversion

·         Selling the family home

·         Working part-time

According to MoneySmart, majority of the retirees get income from at least a couple of sources, like super and the Age Pension. If you are the one nearing retirement or thinking about retirement, an important element to consider is to decide the source of money that you will need to survive and set up a plan to make it last.

The above-mentioned income sources can be clubbed together in order to make your money last longer and enjoy a relaxing retirement.

Following are the five super rules for retirement savings and the same are discussed in detail:

 

Diversified Investments

A majority of the financial advisors tell the investors to diversify their investments. A quote- “Do not put all your eggs in one basket”- tends to float when we talk about risk mitigation. To diversify your investment gives the advantage of mitigating risk associated with the investment by investing in less risky assets. Investment in assets that will grow over time, as shares and property help you to drive benefits of long-term capital gains. The growth in these assets shall provide the benefit of keeping pace with inflation and your income needs

Assessed Financial Position

Being informed about your financial position is the primary step towards a sound investment plan. This helps to get a real and practical picture to develop a plan that is practically feasible and achievable. There are several questions that an individual can answer while making the assessment of his financial position and needs. These are as follows:

·         How much money do you have now?

·         How much money you may possibly have at a point of time or in the future?

·         What shall be the source for the money that you require for investment purpose?

According to Money Smart, you can answer these questions by knowing

·         Type of assets (houses, savings, investments) you have and their worth?

·         Amount of super you have and when you can access it?

·         Whether you are qualified for the Age Pension and the time when you can apply for it?

Long-term Financial Planning

Your needs change over time, whether you agree or not. Over the years as the individual enters various phases of life, he feels more responsible towards himself as well as the family and society. If not all then many of these responsibilities require money to get fulfilled, and that is when you regret not planning your long-term financial needs. Your stagnant income may not be fulfilling for the responsibilities.

For example, in the first few years of retirement, you might want to travel, or you may want to replace your car or renovate your home, or after some time you may want to move into a retirement village.

Every individual is advised to give it a thought about ways to keep finance handy to fund through different stages of your life.

Draw Benefits from your Entitlement

Entitlements are a good source to draw retirement benefits from. In Australia, even if an individual doesn't get the Age Pension, he/she may be qualified to avail additional allowances, such as cheaper medicines, travel discounts and lowered council and water rates.

There are several entitlements and options for investments listed by the Australian Government and Authorities such as Over 55s - your money.

Financial Advice Does No Harm

Financial advisors are professionals that provide assistance to the experienced as well as in-experienced individuals looking for investment. If you are an amateur or inexperienced individual who wants to plan finances and make an investment, seeking assistance from a financial advisor is highly useful.

A financial advisor not only shares the options for investment but also helps to picturise your investment and income in a more realistic manner. You may want to take financial advice to boost your retirement income conditional to your situations. In addition to this, a financial advisor or finance expert can support you with investment options and tax advice as well.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

·         Income from super

·         Investments outside super

·         Age Pension

·         Reverse mortgages and home reversion

·         Selling the family home

·         Working part-time

According to MoneySmart, majority of the retirees get income from at least a couple of sources, like super and the Age Pension. If you are the one nearing retirement or thinking about retirement, an important element to consider is to decide the source of money that you will need to survive and set up a plan to make it last.

The above-mentioned income sources can be clubbed together in order to make your money last longer and enjoy a relaxing retirement.

Following are the five super rules for retirement savings and the same are discussed in detail:

 

Diversified Investments

A majority of the financial advisors tell the investors to diversify their investments. A quote- “Do not put all your eggs in one basket”- tends to float when we talk about risk mitigation. To diversify your investment gives the advantage of mitigating risk associated with the investment by investing in less risky assets. Investment in assets that will grow over time, as shares and property help you to drive benefits of long-term capital gains. The growth in these assets shall provide the benefit of keeping pace with inflation and your income needs

Assessed Financial Position

Being informed about your financial position is the primary step towards a sound investment plan. This helps to get a real and practical picture to develop a plan that is practically feasible and achievable. There are several questions that an individual can answer while making the assessment of his financial position and needs. These are as follows:

·         How much money do you have now?

·         How much money you may possibly have at a point of time or in the future?

·         What shall be the source for the money that you require for investment purpose?

According to Money Smart, you can answer these questions by knowing

·         Type of assets (houses, savings, investments) you have and their worth?

·         Amount of super you have and when you can access it?

·         Whether you are qualified for the Age Pension and the time when you can apply for it?

Long-term Financial Planning

Your needs change over time, whether you agree or not. Over the years as the individual enters various phases of life, he feels more responsible towards himself as well as the family and society. If not all then many of these responsibilities require money to get fulfilled, and that is when you regret not planning your long-term financial needs. Your stagnant income may not be fulfilling for the responsibilities.

For example, in the first few years of retirement, you might want to travel, or you may want to replace your car or renovate your home, or after some time you may want to move into a retirement village.

Every individual is advised to give it a thought about ways to keep finance handy to fund through different stages of your life.

Draw Benefits from your Entitlement

Entitlements are a good source to draw retirement benefits from. In Australia, even if an individual doesn't get the Age Pension, he/she may be qualified to avail additional allowances, such as cheaper medicines, travel discounts and lowered council and water rates.

There are several entitlements and options for investments listed by the Australian Government and Authorities such as Over 55s - your money.

Financial Advice Does No Harm

Financial advisors are professionals that provide assistance to the experienced as well as in-experienced individuals looking for investment. If you are an amateur or inexperienced individual who wants to plan finances and make an investment, seeking assistance from a financial advisor is highly useful.

A financial advisor not only shares the options for investment but also helps to picturise your investment and income in a more realistic manner. You may want to take financial advice to boost your retirement income conditional to your situations. In addition to this, a financial advisor or finance expert can support you with investment options and tax advice as well.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

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