After working hard all your life you reach a point when it is time retire. When this occurs you want to make sure that the lifestyle you have become accustom to can continue. You also want to be able to enjoy your free time without the concern of whether you can afford things such as overseas holidays.
Retirement planning is the process of arranging your finances so that you can achieve the lifestyle that you want for your retirement. It is a very important time in your life because decisions made will impact you for the rest of your life and unlike in your earlier years your ability to return to work an earn money is unlikely.
Many years ago the Federal Government introduced the compulsory superannuation system and with it many incentives to support hard working Australians to fund their own retirement with the intention of being self-funded.
Not all Australians achieve this goal and as a result the welfare system, in particular the age pension, is in place to provide a safety net for Australians. Some retirees will need to access their superannuation, the age pension and other personal investment assets to fund their retirement. This is known as the three pillar strategy.
The benefits of retirement planning include:
- Tax rebates
- Higher tax free thresholds
- Zero taxation on investment earnings
- By acting sooner it is likely that you will have a larger retirement nest egg. Meaning an improved standard of living.
- Peace of mind knowing that your retirement nest egg will provide you with a lifestyle that you desire
- If you wish, a legacy for your children and grandchildren.