financial advice for superannuation

David and Lisa, both 58          

Lisa and I were looking to retire back in 2007 when the Global Financial Crisis (GFC) struck and slashed our retirement savings. We were really disappointed as we had our sights set on our big European adventure.

Of course we could have retired if we wanted to. But our financial adviser told us that if we retired and started drawing a pension we’d be starting to draw on our retirement capital at a low point  and that would have been devastating for our retirement plans as starting at a lower balance means it would go down more quickly and may not last as long as needed.

He also shared some modelling with us that showed us our planned Europe trip would have forced us to make some tough choices about spending.

We decided we’d rather keep working. But at the same time I wasn’t too keen on the idea of slugging away for another ten years.

Luckily, our adviser helped us hatch a good plan to boost super savings fast. Basically we’re both starting to salary sacrifice large amounts of money into super, while using a transition to retirement income stream to top up our income.

In the three past years our super has recovered considerably, and with the tax concessions we’re getting on the money we’re sacrificing, we’re seeing real results on our balances. From age 60 it becomes even more effective as the pension income becomes tax free.  In fact we’re so encouraged by it that we’ve decided to hold off retirement until we reach age 63. And best of all, Europe’s back on the agenda!