Welcome to Part 3 in our Four Part Series – Planning for Retirement. This month we look at those aged in their 50’s and early 60’s who now have retirement on the horizon and would like to know what they should be doing to get their super ready. It is a very important life stage so it is vital to take up any opportunities that are available before it is too late.

Super

So you are approaching the end of your working phase of life (congratulations!!) and want to check you have everything in order before you hang up the boots. The important things to start considering for you here if you haven’t already done so are the following:

  • Liquidity for when you start a pension & your investment strategy
  • Top – up contributions
  • Insurance coverage
  • Estate planning

It sounds like a fair amount and in reality it probably is. But getting the right advice and assistance can make preparing for retirement an enjoyable journey and very fulfilling. Let’s touch on these key areas to see what you can be doing.

Liquidity & your investment strategy

If you have your own SMSF or are a member of a retail or industry fund you have reviewed your investment strategy many times during your working life (hopefully). Perhaps you do it every year and have already changed your strategy previously. Either way it is important to consider this next phase as it does impact your future.

For those in an SMSF, you will need to start thinking about funding your pension. This means making sure the fund has enough cash and income to pay for your lifestyle when you retire. Also, remember when you do start a pension you need to take the minimum out each year (see the thresholds here).

If you have a property in super that doesn’t receive enough rent to cover your pension you will need to review your strategy and implement changes soon in preparation. Read more about your investment strategy here.

Top-up contributions

After the age of 66 making contributions to super can be a bit difficult. It depends on things like the work test and can be impacted by legislation changes (see the most recent changes here). It is therefore very worthwhile to consider making additional contributions to super now.

Perhaps you have reduced your debt and have a bit extra than usual. Now may be the time to start further increasing your salary sacrificing, utilising catch-up contribution rules or making personal contributions to super. We have several great articles in this space which you may find useful:

An added benefit of increasing your contributions to super is it can improve your fund liquidity at the same time, preparing you for your pension phase of life.

Also check out our case study about making in-specie contributions to super (this is where you transfer assets to your SMSF). It might be very worthwhile for you.

Insurance coverage

Insurance is more complex than you would think. Firstly you want to make sure you have the right insurance in place for the right situations, but you also want to make sure you are not paying for something you don’t need. Now that you are in your 50’s and 60’s an insurance review is very important. Do you need all the cover you have? Or do you have a medical condition that could make changing policies very difficult? Book that appointment with your insurance advisor as soon as possible for your review.

Estate planning

We don’t like thinking about it too much but preparing for when we depart is vital. You may already have a few things in place but keeping things up to date it really imperative. Situations change so make sure you review your estate plan at least every two years. Two key areas in your 50’s and early 60’s are your Will and your binding death benefit nominations. Read our articles below to find out more:

For those about to start a pension check out Part Four (soon to be released) in our series to find about your estate plan considerations as they do differ, or contact us here for more information.

This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.