Time flies by really fast. One moment you’re playing egg-and-spoon races with your friends in primary school, and the next, you’re receiving baked cookies from your grandchildren.
Time doesn’t stop for or obey any man. Wasting time or failing to plan for essential activities can cost you big time.
As soon as you secure a job or start accumulating wealth, your retirement, super, and will plans should start lingering in your mind.
Planning for these critical life events may seem complicated.
Today we’ll show you an easy way to prepare for your retirement. We’ll discuss managing your retirement, super account, and will.
How to Manage Your Retirement Plans
A critical part of planning and managing your retirement plan involves savings and investment.
According to AFSA, everyone should aim to make 60% of their working income during retirement. So, if you’re currently earning AUD150,000 per annum, your retirement activities should earn you at least AUD90,000 every year.
Achieving this retirement goal is a lot harder than it seems, and that’s why you should begin planning and managing your retirement early.
To effectively manage your retirement,
- Save for your retirement
- Familiarise yourself with your retirement needs
Save for Your Retirement
If you’ve already established a saving plan for retirement, keep going!
Saving for a rainy day is a rewarding habit because it prepares you to navigate tough days when you won’t have your current source of income. If you haven’t started saving, get started soon.
If you start saving for retirement early, you’ll have more time to save and plan.
The extra time and savings will enable your retirement business to take root. By the time you retire, the business will be able to bring you enough income to allow you to enjoy comfortable retirement life.
Prioritising retirement savings involves coming up with your goal, devising a plan, and sticking to it.
Remember, it’s never too late or early to start saving.
Familiarise Yourself With Your Retirement Needs
Your retirement can turn into misery if your income can’t cater to your needs. Today, your income allows you to maintain and even improve your living standards.
If you retire without an alternative source of income, you’ll have to degrade your living standards.
Old age also comes with several health challenges, which can be very expensive to treat if you don’t have a comprehensive insurance plan.
Planning is the most appropriate way of ensuring your financial security during retirement. It involves listing your projected expenses, analysing your future income, and establishing whether the income will satisfy your needs sufficiently.
The following strategies will come in handy when planning for your retirement:
- Downsize your loans and debts by finding a way of settling them before retirement
- Use retirement accounts to save as much as you can
- Diversify your investments so you can finance your retirement using multiple revenue streams
- Decide where you’ll spend your retirement years
How to Manage Your Super Account
Financial security often requires relying on more than one income stream. Superannuation may provide the extra money you need to live a comfortable retirement life.
Super is highly dependent on your savings. The more money you put aside in savings, the higher the chances that you’ll have sufficient funds to support yourself and your loved ones. Managing your super involves knowing about:
- What you’re entitled to
- Your employer’s contribution to your super
- Limitations
- The appropriate super fund for you
- Account operating fees
This knowledge will enable you to understand and compare the several super fund products available in the market and settle for the one that best fulfils your needs.
You’ll have to make several decisions to help you find the best super package, and these include:
- When to begin your super
- What to do when changing jobs
- Closely monitoring your super
When Do You Enrol in a Super?
You’ll benefit the most if you subscribe to a super plan as soon as possible. That means enrolling in a super the moment you secure your first job.
Most employers will allow you to select the fund where you’ll save your super. However, you could also fill out a superannuation standard choice form to provide details about your super fund. Discuss your eligibility for the fund you’ve selected with your employer.
The super fund is not just for those in formal employment. You could also sign up and open a super account to begin saving for your retirement if you’re self-employed.
The super fund is also available for temporary residents.
What Do You Do When Changing Jobs?
When changing jobs, you may be required to change your super fund. Changing positions and workplaces allows you to review your super fund and establish whether you’re happy with its features and fees.
Additionally, changing jobs often sometimes leaves you with numerous super accounts. As much as these accounts help you save for retirement, they also attract maintenance fees. You can save the money spent to keep these accounts by combining your savings into one account.
Review the ATO Online Services for guidance on consolidating your savings into a single account. While selecting the single charge, ensure it offers you the best rates and insurance options.
Monitor Your Super Closely
Keeping track of your account helps you know when you should take action to improve your super savings.
You can have one or more super accounts, as summarised in the table below:
| Type of Super Fund | Features |
| Accumulation Fund | ● Your savings accumulate with time ● Its value depends on your contributions and those of your employer |
| My Super Fund | ● It’s the default retirement saving option for those who don’t choose a fund upon commencing employment ● Divided into public the sector, retail, industry, and corporate categories |
| Self-Managed Superannuation Funds (SMSFs) | ● The contributor is also a trustee and is charged with complying will all tax and super laws |
Super accounts are designed to give you peace of mind. However, there may come a time when you need to take action to streamline your savings. For example, you may have a super account that you may have forgotten about or lost.
Continuously monitor your super accounts by regularly logging into ATO Online Services. ATO will show you all the funds held in your name.
While at ATO, check the following:
- Your super fund statements and payslips to ensure your employer is forwarding the right amounts of super payments
- The charges you’re paying to maintain your account
- The option to increase your savings to make your retirement even more comfortable
How to Manage Your Will
Alt: retired woman discussing her will with a consultant
Managing your will helps avoid problems that may arise from distributing and administering the property you leave behind after your death. Proper management will also help minimise property taxes that could burden your loved ones once the property moves to their control.
Managing your will can be hectic, given the numerous legal requirements. But it doesn’t have to be. You can always seek an expert’s services to help you manage your will.
Experts will help ensure that you’ve written the will properly and that it reflects your desires concerning your property once you’re gone.
To properly manage your will, you’ll need to:
- Select your executors
- Select your beneficiaries
Select Your Executors
Proper execution of your will depends primarily on the executor you choose. The executor you settle for must be someone you trust and believe can manage your estate according to your wishes.
Experts will always advise that you choose someone younger than you are to be your executor. A younger person, such as your daughter or son, will likely survive you and ensure everything runs as you’d insisted in your will.
You can always select more than one executor to increase the chances of your desires being carried out as outlined in the document.
A supplementary executor also helps to ensure that there will always be someone to actualise your will in situations where your original executor passes away before you do.
Another increasingly popular option involves using a professional executor, such as a lawyer. The skilled lawyer often has many tools at their disposal to ensure your will is actualised.
Select Your Beneficiaries
As much as you’re free to leave your property to anyone or any organisation you desire, also include those entitled to benefit from your wealth.
Failing to include your children or spouse in your will can easily trigger a costly and time-consuming court process to challenge the document.
Ensure you include the following in your will:
- All your children, including those from extramarital affairs
- Any child you treat as your own and depends on you
- Your marriage partner
- Any relative who depends on you
- You could also include any other person who would otherwise not qualify for inheritance because they’re not your next of kin
Frequently Asked Questions
When can I withdraw funds from my superannuation account?
In Australia, you can access the funds in your super once you turn 65. Thus, you can withdraw the funds even if you’re still working.
How many times can I withdraw from my super fund?
You can withdraw from your superfund multiple times. The minimum withdrawable amount from a superfund is AUD1000, while the maximum is AUD10,000.
Can I withdraw my entire super?
Yes. However, you’ll be taxed if you choose to withdraw all the funds at a go. The government will consider your lumpsum withdrawal as an income and subject it to income tax.
