Superannuation & Retirement Planning

Preparing yourself for the retirement you want

Questions to ask yourself…

  • Have your adult children moved out of the family home?
  • Have you finished paying your mortgage?
  • Do you plan on cutting down work hours or retiring in the next 5-10 years?
  • Are you on track to create the kind of lifestyle you want in retirement?
  • Do you have children and grandchildren you want to help out?

A financial adviser can talk you through big financial decisions and help put a plan in place to help you start planning for retirement.

Superannuation overview

Why invest in superannuation?

Advantages of investing in assets in the superannuation environment include:

  • Concessional tax treatment
  • Ideal form of savings for retirement
  • Insurance benefits can be attached
  • Government co-contributions incentive.

Superannuation exists to help you provide for yourself in retirement rather than relying on social security. As a result, your superannuation savings cannot be accessed until a condition of release is met, such as retirement or reaching age 65.

How is your money invested?

When saving for retirement, it is important to recognise that your investment timeframe is long term. For this reason many experts suggest it is important to invest in an appropriate level of growth assets within a superannuation fund.

While these types of assets (such as shares and property investments) are generally considered higher risk over the short to medium term, over the long term they will generally outperform other types of assets (such as cash).

Once approaching retirement, your investment timeframe becomes shorter and your tolerance of fluctuations in the value of your investment capital may become lower. Taking this into account, many investors shift some of their assets towards lower risk asset classes such as cash and bonds when nearing retirement.

What does preservation mean?

Superannuation benefits are classified into three different preservation categories according to how accessible they are to a member, namely:

  • Preserved benefits
  • Restricted non-preserved benefits
  • Unrestricted non-preserved benefits.

Preserved benefits

Preserved benefits must remain in the accumulation phase of a superannuation fund until a condition of release has been met (see later).

Note, however, that under the ‘transition to retirement’ measures, a member who has reached preservation age may be able to access their preserved bene ts through a non-commutable income stream.

Restricted non-preserved benefits

Restricted non-preserved benefits generally include certain contributions made before 1 July 1999. They must remain in a superannuation fund until a condition of release has been met or may be accessed under the ‘transition to retirement’ measures.

Restricted non-preserved benefits have an additional condition of release. Where a member has left employment with an employer who contributed to the fund on their behalf, all restricted non-preserved bene ts in that fund become ‘unrestricted’ and can be accessed immediately.

Unrestricted non-preserved benefit

These consist of some or all of:

  • Previously preserved or restricted non-preserved benefits where the client has satisfied a condition of release and no cashing restriction applies
  • Employment Termination Payments (formerly known as Employer Eligible Termination Payments) rolled over to the fund before 1 July 2004
  • Unrestricted non-preserved benefits rolled over to the fund
  • Any earnings on the above three amounts for the period prior to 1 July 1999.

Generally, a member will have full access to unrestricted non-preserved benefits.

Interested in speaking with a financial adviser?

Contact Capital Advice Partners on 02 8920 3488 or use the form on the right today.

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