Managing your income
While working full time, salary or wages are generally the main source of income, along with any investments or savings accounts. In retirement, where money is coming from isn't something taken for granted. Likely sources of income in retirement will be:
Superannuation: the money put aside over one's working life will form the core of retirement income. Once retired and reached preservation age, a person can access his or her super either as a lump sum or in the form of regular payments, such as a pension or annuity. Super benefits are generally tax free when taken after the age of 60.
Additional savings and investments: interest income from savings accounts and dividend income from shares or managed funds. This income is taxable.
Government Age Pension: eligibility depends on age, income and assets. The Federal Government is gradually increasing the age from which people will be entitled to the Age Pension so it will be 67 for men and women by 2023.
Work: a person may choose to continue working part-time after he or she has officially retired.
There are a vast number of strategies to make the most of one's income, both approaching retirement and once retired. This is why having a financial adviser can be so beneficial.
Some of the key considerations are:
- How to use your super in the most tax-effective way.
- Ensuring you preserve your capital while having enough income to live on.
- Ensuring that the income you get from your savings keeps up with inflation.
- Protecting your assets to ensure a regular income for the rest of your life, regardless of how long you live.
