My super allows me to travel more than ever
For many people, retirement means finally having the time to travel the world. It’s a dream for many but it’s not always affordable to do so.
Derek and Carolyn Le-Grand always knew they wanted to travel when they retired.
“During our working life we endeavoured to travel when we could but could never enjoy the opportunity to spend the time we needed to savour the places we visited,” says Carolyn, adding, “It was always a taste of Italy or a taste of London. It was always ‘we must go back there someday’.”
The couple, who’ve been retired for a little under two years now, knew that with big plans to travel they had to be smart and put in a savings plan whilst working.
“We had to work and work smart to plan for a comfortable retirement. We did not spend every dollar but invested wisely in property to supplement our retirement fund,” explains Carolyn, who is quick to add planning is key. “Having just been through it, we suggest people save towards their retirement from an early stage and to include in your financial planning for retirement,” she enthuses. “If possible, a good chunk of money towards luxuries such as travel in addition to superannuation to cover living expenses. Don’t assume you won’t live that long or won’t want to travel when you are older! You can’t see ‘round corners.”
With tickets booked for a grand South American adventure later this year, and having already travelled around Australia and gone on a number of cruises, the Le-Grands are loving their retirement.
“Retirement is when you have the time to do things at leisure. Life is good – we can afford to go to restaurants, travel, shows and socialising. This would not be the case without planning ahead.”
It’s a view that Dean Felton from AustralianSuper, Australia’s largest industry superannuation fund, is glad to hear.
“Unfortunately some people don’t think carefully enough about their retirements until it becomes a real prospect on their horizons,” he says, before adding, “But there’s no need to panic! Many people, even those with modest balances, will be able to combine their super savings with a full or part pension to give themselves an income in retirement.”
While Felton acknowledges there are many different paths to follow when preparing for retirement, he outlines the three basic steps everyone should consider when planning.
“Set your financial goals. Build your savings. Manage your retirement income,” he advises, continuing, “Whatever your retirement plans, you’ll need money put away to meet your day-to-day expenses, as well as any unexpected costs. How much you actually need will depend on any outstanding debts, your everyday expenses and any travel or leisure plans you have.”
With Australians enjoying better health and a longer life expectancy than ever, it’s important to remember that you’ll most likely be spending more time in retirement than people ever did before.
Felton has a word of caution for all. “When you retire, you’ll need money to live on and it is likely that it will need to last 20 or more years.”
“Good preparation and the right advice can help you retire with confidence,” he finished.
For those concerned about what they can do, Felton advises the following:
For people who are still working:
- “People who are still working can help build their super balance by combining multiple super accounts into one to avoid paying multiple fees; to make sure their fund offers a track record of good investment performance; doesn’t charge excessive fees; and if they can, by contributing extra to their super savings through salary sacrifice (pre-tax) or after-tax payments.
- “Through salary sacrifice, you’ll potentially pay less tax than you would if you had taken the money as income. Meanwhile your money is (hopefully) growing through the benefits of compounding in their super fund.”
For people who are about to retire:
- “One option that many people have used as they approach the end of their working lives is a Transition To Retirement (TTR) strategy. This lets you contribute extra to your super from your before-tax salary while still maintaining your take-home pay by drawing on some of your super savings in a retirement income account.”
- “Savings occur if the tax you pay on your salary sacrifice contributions is less than the tax you pay on your salary. And it’s these tax savings that are turned into extra super. It’s a particularly tax-smart strategy once you turn 60 when the payments you receive from a retirement income account become tax-free.”
THIS IS A SPONSORED FEATURE IN CONJUNCTION WITH AUSTRALIANSUPER
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