Whether you’re just starting in the workforce, in the middle of your career, or close to retirement age, it’s important to plan ahead for your pension years.
You may think retirement is a simple decision, and that putting away money every month is all you need to do to plan.
But pension options are many and there are considerations about your path to retirement that aren’t just about saving money.
While about 65% of Australians rely on a government pension, there are criteria that must be met to qualify.
It’s good to know pension options well before you reach retirement age, and a financial adviser can help.
You want to ensure you have the resources to enjoy a stress-free life after leaving the workforce. But you also want to do that with as little stress and risk as possible while you’re still working.
So, here are 3 reasons you should get pension advice.
One of the best reasons for seeking pension advice is to build an investment plan well before you need to use a pension.
A registered financial adviser or financial planner will help you make decisions in areas such as:
Beyond just pension advice, a financial adviser can also support you with information on estate planning, risk management, taxation, insurance and more.
To provide advice in these areas, a financial adviser needs to be licensed by the Australian Securities and InvestmentsCommission (ASIC). To determine if a financial adviser is authorized to give you the advice you need, you can check the ASIC financial advisers register.
Your pension options may include a pension allowance from the government, such as the Age Pension. But how much you receive from the Age Pension will depend on your other sources. The major things that are considered are your assets outside of your home and income which you can generate from those assets.
It’s true that a big part of retirement planning is how much money you set aside. After all, you want to ensure you have the finances available to enjoy a healthy lifestyle when you’re no longer in the workforce.
When you retire, your possible income sources include income from your super and investments outside your super. There’s also the Age Pension, but it’s worth knowing that one income source can impact other sources. For instance, selling your home could result in a reduction in your Age Pension.
A financial adviser can help you with decisions about selling your home, looking at longevity risk, or even working part-time when you retire.
That’s because planning is also about the new reality of collecting a pension, which means planning for expenses in retirement and looking for opportunities to maximize your finances.
How you invest your money and how you operate in the tax structure of retirement are other important considerations.
Age, income and assets all play a part in your pension planning. Getting pension advice will ensure you’re aware of the many considerations beyond simply saving money.
And, professional advice is particularly valuable in times of significant change, like moving from the workforce into retirement.
With so many different considerations, it can be stressful to try and understand it all by yourself. Dealing with concepts like the Age Pension, managing your super, and other components of retirement can cause a lot of headaches.
Using a professional adviser who works in the industry and can help you to understand your pension options will help reduce a lot of stress.
For instance, pension advice can even help you decide when to retire.
You can access your super between the ages of 55 and 60, depending on your birth year. You can become eligible for the Age Pension at age 65, which will change to 67 by 2023.
But when you retire is up to you, and understanding the implications of when to retire will help with that decision. You can even continue to work past Age Pension age.
Without pension advice, you may not understand all the difference considerations to determining the best time to retire.
With so many different components to pension options, it can be difficult to navigate on your own.
Seeking pension advice at any stage of your work life can help reduce stress while also ensuring you have the best plan for your future.
With the right plan, you can have a healthy and happy retirement with the best pension options available to you.