Approaching retirement
Some people can't wait to get out of the rat-race - others want to ease out gradually to keep the benefits of working a little longer. Many financial advisers believe an extra two years work can fund a full six years of retirement.
Ease out of work and into retirement
Some of us can't wait to retire while others may be reluctant to lose the stimulation and friendships of their working life - not to mention the income. If you define yourself by your work, you may lose direction if you stop work overnight. This is why instead of retiring completely; many people opt to ease out gradually by working part time, working as a consultant or volunteering. Easing yourself gradually out of the workforce, rather than overnight, may help you adjust better to the changes.
It comes down to what we want in retirement - and what we can afford. This decision is important because many financial planners believe an extra two years work can fund a full six years of retirement.
Save more
You will spend a long time retired. Today's long life expectancies mean many of us will have 30 or more years in retirement. Working longer means you may have more savings to fund your retirement.
More opportunities for work
As the baby boomer generation moves into their senior years, Australia faces an ageing population and a decrease in the number of the younger workers available. This may mean more employment opportunities are available to you to help you transition into your retirement.
Consider your super cut off
Super Guarantee contributions are only required to be made by your employer until you turn 70. Once your turn 65 you have to meet a "work test" to be able to add more to your super but once you turn 75, contributions generally cannot be made by you or made on your behalf.
Accessing your super
You can generally access your super once you permanently retire after reaching your preservation age or when you turn 65. When you access your super, you will have the option of drawing a lump sum, converting to a pension or combination of both.
You can, however, leave your money in your super fund as long as you wish regardless of your age or employment status. This may be particularly useful if you are living off other savings or investments and don't need to draw an income just yet. You only need to draw on your super when you are ready to.
Did you know?
Being self-employed can afford you flexibility and freedom, but it’s important to ensure that your financial interests and those of your business are being properly managed.
Your income and financial needs are likely to change through your working life. There are however some sound financial habits which once learned will always be beneficial.
