Planning your retirement – and then enjoying it once you’re there - isn’t a set and forget activity. Here are four easy actions to do each year, to help make sure your retirement savings stay on track.
Simple steps to stay on track
1. Smarten your super
Part of getting the most out of retirement is feeling confident that you’re getting the most out of your retirement savings. And for many Australians, superannuation will be an important part of your income in retirement.
Small things you do now can make a big difference to your super balance later.
Find your lost super
There’s over $17 billion in lost and unclaimed super in Australia. A quick check could uncover money that belongs to you.
Check your super account basics
Make sure your contributions, fees, insurance and details are correct. A quick review can keep your super on track.
Consider bringing your super accounts together
Having more than one account can mean paying more than one set of fees. Combining them could save money and make your super easier to manage. Before you combine super accounts though, it's important to check whether you might lose any insurance cover, and whether there will be any tax implications.
Review your super investment options
Your super fund most probably offers a number of different investment choices. Learn more about super investment options. And check if your current choice still matches your goals and how much risk you’re comfortable with.
Think about adding extra to your super
Adding a little more can grow your balance faster – and may even lower your tax. There are several ways you can put extra money into your super account, if that's the right choice for you.
2. Tackle your debt
Many people retire still owing money on their mortgage or other assets like their car. If you’re approaching retirement you can take steps to get debt under control.
If you still have debts when you reach retirement age, you could choose to pay off the debts using:
- your superannuation
- other savings
- other money, such as proceeds from downsizing your home
Before going ahead with any of these options, check the tax impact and whether it will affect your government benefits.
Consider getting financial advice to help you understand your options.
Bill retires with money still owing on his home loan
Bill has a home worth $1 million and still has $200,000 owing on his home loan. He is 67 years of age, lives alone and has a superannuation balance $100,000 over the Age Pension limit.
Currently he is not eligible for the age pension because his assessable assets – his super – is above the cut-off point for a part pension.
If Bill takes $200,000 from his super and pays off his home loan, his assessable assets drop to $600,000, putting him below the cut-off point. He will also save on interest and principal repayments.
While Bill gets less super, he becomes eligible for the Age Pension and all the associated subsidies. He also likes that he can stay in his current home.
3. Check that you’re covered
From estate planning to insurance, it’s important to check that you have the right protection in place, to look after what you have.
4. Stay on top of investment scams
Be suspicious of anyone offering you easy money. Scammers are skilled at convincing you that the investment is real, the returns are high and the risks are low. There's always a catch. Learn more about how to spot investment scams.
High-pressure sales tactics are putting your super savings at risk. Be on red alert for phone calls, click bait advertising and promises of unrealistic returns to encourage you to put your super into risky investments. Stop, think carefully, and check the claims first.
Read the investor alert and our tips on how to protect your money.
If you think you've been targeted by scammers, act quickly. For steps to take and where to report a scam, see what to do if you've been scammed.
Ready to plan?
As your situation changes, use the Moneysmart retirement planner to estimate:
- how much money you'll have to spend each year once you retire
- how fees, investment options and contributions will affect your retirement income
You can also use the planner to test out different scenarios and work out how to grow your super.
Plan for your retirement income using the planner.