The 7 key retirement planning numbers you need
Are you confused about your retirement planning?
Not sure when you can stop working and access your super?
Don’t know how much money you will need to live each week?
What about tax, and if you are eligible for any government assistance?
We are often asked these questions by both our existing and new clients.
To simplify things for you, these are the 7 key numbers you need to be aware of:
- 90. A healthy couple at age 65 has a 50% chance one member will live past 90. That means you need to plan for being retired a lot longer than you may expect.
- 70. That’s the percentage of your current income you should aim to replace. This is based on you wanting to maintain your current standard of living when you are no longer working. It relies on structuring your income so you will pay little to no tax compared to your income from working, and assumes that you will no longer need to save for your retirement or pay off a mortgage. Of course if you’re a high income earner your living expenses likely represent a lower percentage of this than for most people, so you may only need to replace a smaller percentage of your income.
- 65.5. This is the current qualifying age for Age Pension and Commonwealth Seniors Health Card entitlements. This will increase to 66 years from 1 January 2020.
- 65. This is the age you are automatically granted access to your super, even if you are continuing to work.
- 60. This is an important number for two reasons. Firstly, you are able to access your super if you cease an employment arrangement (perhaps because you change jobs). But more importantly, if you are eligible to access your super without limitations, you can withdraw your monies (whether as an income stream or a lump sum) tax free.
- 57. This is the age at which you can first access your superannuation benefits. You either need to stop working and intend never to return to work (unrestricted access) or you can have limited access under the transition to retirement provisions.
- 0. This is the tax rate applicable to the earnings on your superannuation monies when you retire, and the amount of tax you will pay when you withdraw money from super after you have reached age 60.
Are you confident you are on track to retire comfortably? If not, simply reply to this email and ask: What’s my number?
