In retirement, every dollar counts and it is worth exploring different strategies to grow your retirement income. Here’s how do it…
Use your super wisely
If you’re about to retire or are in retirement, it can be tempting to take your superannuation as a lump sum payment. However, this means taking money out of a tax-friendly environment and potentially placing it in investments that could attract tax at higher rates.
An alternative is to use your super savings to purchase a retirement income stream called an ‘account based pension’ or allocated pension. The earnings of an account based pension are tax-free and you enjoy a regular source of cash in much the same way your wage or salary was paid during your working days.
Review your super investment mix
If you choose to leave your super savings in the superannuation environment, it is important to review the way your super is invested at least annually. It can be tempting to switch all your super to low-risk investments but without some exposure to higher risk ‘growth’ assets like shares and/or property, your super savings might not benefit from potential capital growth.
Consider age pension entitlements
Depending on your assets and income, you may be entitled to receive a full or part payment of the age pension. Even a small part payment could see you entitled to a range of concessions including discounts on council rates and other benefits.
If you are a home owner, your family home could be your most valuable asset – worth more than even your superannuation. Your home equity can provide a potential source of funds in retirement, and you may not have to sell up or move in order to benefit from that equity.
Think about using home equity
Your financial adviser can discuss possible options to access home equity in retirement.
Source: BT