Happiness might be the most sought-after factor to consider a successful retired life, but fulfilment is what most people aspire for. One key to a fulfilled retirement is proper planning of your retirement income.
With your money, you could choose to set up a business, buy bonds from the government and shares from private companies, go on vacations, among others. The key in all this is planning for your retirement savings needs. Planning long term is setting yourself up for quality life in your golden years.
What is a realistic retirement income?
If you wish to retire in Australia, you must be over the age of 55. For modest retirement, you must have more money than the Government Age Pension but still not be able to enjoy many leisure activities. This is modest and not comfortable enough.
To enjoy a comfortable retirement, according to the Australian Superannuation Fund Association’s Retirement Standard, you need about AUD 545,000 in savings at retirement for singles or AUD 640,000 for couples. This is assuming you own a home and don’t need to pay rent.
Take into account this gives you the necessary background when making retirement decisions. For example, how much you spend on luxuries after retirement will depend on where you lie as regards to your super fund.
What is a retirement income stream?
An income stream lets you know how you will receive your pension and how it will be paid. It also shows how much money you have accumulated per year for super retirement. You can choose to withdraw a lump sum of your money or receive it in regular streams from your superannuation when you retire.
Super income streams are tax-free for people over 60 years of age, and you can choose how much you want to receive and how often, depending on your needs and type of income stream. You may see more information about this from our website.
Types of retirement income streams
In Australia, there are three income streams options that help you get and increase your super. Read the information below to find out.
- Account-based pensions – a regular stream using the proceeds from your super balance
- Annuities – a contract that provides between you and the employer that allows you to accumulate funds during a specified period of time.
- Defined benefit pensions – is where an employer provides pension payment on retirement based on an employee’s earnings.
Selecting the right income stream upon retirement is dependent on what plans you have for your retirement. Most older Australians are encouraged to undertake super investments for their future. For more information, visit our website.
How to Budget Your Retirement Income
A financial adviser will provide investment and personal financial advice and information to make sure that you are in sync with your budget. You can take action with their help. You will also receive a product disclosure statement for any product or recommendation you get.
- Track financial account to see your financial situation when you perform an audit, file tax returns, and prioritise expenses, especially during pre-retirement.
- Make a list of all your expenses that cost the same amount monthly, and that is paid on a regular basis per year.
- List expenses that can change over time.
- Put together information about your non-recurring expenses.
- Make an estimate of what you may expect to get from your superannuation and other pension schemes.
- Compare your total expenses to your income.
Conclusion
To enjoy a higher standard of living the long years of retirement, retirees need to start early contributions and investments for the future to supplement the super and age pension. Whether you want to use your investment funds for paying off your home loan, medical or assistance in the home, take your time to understand your options.
Remember to take into account the income stream you will use upon retirement to receive your super. It’s not too late to take this advice and begin an investment. Track, review and create a report for your money to save the hassle in the long run.
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