Thinking about retirement? If you are looking towards retirement soon, there are a number of questions you may be asking yourself such as: How much income do I need in retirement? Do I have enough in super and how long will it last? Is there anything I can do before retirement to maximise my savings? Will I be eligible for any age pension? Am I allowed to continue working in retirement? To help you get answers to these questions, we have provided a range of fact sheets, calculators and collated comments below from our financial planners for your information.

How much income do I need in retirement?

This is one of the most common questions we receive from our members approaching retirement.

As a guide, most people need 50%-75% of their pre-retirement income to support them in retirement. The following questions may help you determine your income needs:

• What is your current net take home income each fortnight (or month) and calculate this into an annual amount.
• Do you want to maintain this income in retirement or do you require something higher and perhaps lower?
• Do I need access to lump sums for things such as holidays, a new car or home renovations?
• The answers to these questions may help you determine the level of income that suits you.

The Association of Superannuation Funds of Australia (ASFA) in conjunction with Westpac has provided detailed research in the area of retirement incomes. The table below can be used as a guide to what is considered a modest income in retirement to a comfortable income in retirement.

How much super do I need for a modest lifestyle?* Status Amount per week Amount per annum Single $402.37 $20,981 Couple $582.99 $30,399		How much super do I need for a comfortable lifestyle?^ Status Amount per week Amount per annum Single $750.99 $39,159 Couple $1,027.27 $53,565
* Better than just surviving on the age pension but still only able to afford fairly basic activities		^ Broad range of leisure and recreational activities and a good standard of living with the purchase of household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment and domestic and occasionally international travel.

 

Catholic Super members can set up a pension which can be used to generate a regular, tax effective income in retirement.

Do I have enough in super and how long will it last?

Once you have determined your income needs in retirement, your next question is whether you have enough in super and will it last your life expectancy?

If you're planning to retire at age 65, research suggests that you're likely to live for another 20 years – a woman at age 65 has an average life expectancy of 86 years and for a man at age 65, it is 83 years.

To assist you in working out whether you have enough in super, we have developed a calculator which will provide you with a guide as to how long your funds will last.

Is there anything I can do before retirement to maximise my savings?

You may have heard about the Transition to Retirement strategy that is available for anyone over the age of 55.

This strategy allows you to convert your superannuation savings into a tax effective income stream (ie. a pension). As a result of this additional income, you can then increase the amount you salary sacrifice into superannuation. The objective is to maximise the savings you will have in superannuation when you retire and a financial planner can give you advice in this area.

For more information about this strategy:

• Catholic Super offers a Pre-Retirement Pension to our members which can be used as part of a transition to retirement strategy

Will I be eligible for any age pension?

Many Australians will be eligible for at least a part age pension. The amount of age pension which you will be eligible for will be determined by the amount of assets you have (excluding your home) or the amount of income you earn. The age pension age for men is 65 and for women it is also 65 unless you were born before 1st January 1949.

If you are not eligible for the age pension, you may still be eligible for the Commonwealth Seniors Health Card.

If you need more information, you can contact your local Centrelink office.

Am I allowed to continue working in retirement?

Yes, anyone can continue to work during retirement but there are some issues that need to be considered:

• If you are of age pension age, you need to consider the impact on your age pension. It is important that you keep Centrelink informed in such cases.
• Remember that you may be eligible for a Government co contribution of up to $1,000 - please refer to Super Co-contribution for more information.
• You may want to maintain a small superannuation account for employer contributions and co contribution entitlements.

How can Catholic Super help?

Catholic Super offers financial and retirement planning services to all members through its wholly owned subsidiary, CSF Financial Services Pty Limited (AFSL 298046), trading as Catholic Financial Services. Our professionally trained staff are able to provide these services to all Catholic Super members. Read more on getting financial advice.