Nearly 30 years ago the government implemented a new and exciting way to help people become more self-reliant in their retirement. They could see that as the population aged and people were going to live longer in retirement, the arrangements in place at that time would not be economically viable in the future.
In the simplest form Superannuation is a tax environment for your retirement savings where the earnings are taxed at a generous rate of 15%. The government provides this generous tax rate for your retirement savings as a return for forgoing access to this money until you meet a “condition of release”, which is basically your retirement from paid work after a certain age.
Fast forward to now and the system has become a lot more complex. It is not just a simple tax environment that your employer pays into which builds funds that, once you have retired, you use as an income stream. We need to dive deeper into what that money is doing and checking how well it is working for you.
There are the questions of:
With all these questions being highly personal, there is no one right answer for everyone. Utilising an adviser to help you answer these questions can make a huge difference to what the financial picture for your retirement will actually look like.
Terrell Hyman the Director and Principal Advisor at Trl Financial Solutions.