Superannuation

What is Superannuation?

Superannuation (super) is a means of accumulating wealth for your retirement and is, in part, compulsory. It can provide either a lump-sum or a regular income stream once you stop work. To encourage super savings, the Government has provided some distinct tax advantages (savings):

• you can invest ‘before-tax’ income through salary sacrifice;
• the income on your investment is concessionally taxed; and
• your benefits are generally tax-free if received after you turn 60.

Rich River Wealth will work with you to review your retirement planning and how superannuation may form a part of this.

We can discuss investment options, your risk tolerance level and how superannuation may help to achieve your desired retirement income to maintain your lifestyle.

Case Study – Superannuation Review

A 35 year old male approached us to review his superannuation after the share market drop in April 2020 surrounding COVID-19. His goal was to maximise his returns so he could retire as soon as possible.

We discussed his attitude to risk and returns, went through his existing Australian Super and CBUS Super statements, explaining the current default investments had poor relative performance and did not match his risk profile. He also had doubled up on insurance that he was paying over $2,000 p.a. Once we explained this, he told us he didn’t need this as he had no children and no significant debt.

Using our research software which allows us to compare all Australian Superannuation funds and the underlying investments, we created customised advice for him recommending a new superannuation fund which gave him access to better quality, higher performing investments.

The fees were around $900 more each year, but due to the back tested historical performance, his proposed investments would have returned an estimated 3% p.a. extra which represents an extra $7,500 p.a. based on his balance of $250,000.

HOW WE HELPED

  • Review of insurance
  • Consolidation of superannuation accounts
  • Review of superannuation fund performance

Pensions

Account Based Pension

An account based pension (or pension account) lets you take your super as regular payments, when you retire. By transferring money from your super to an account based pension, you can draw regular income payments, while your balance stays invested. This gives you the potential for continued investment returns throughout your retirement.

You choose how much income you want to receive and how often. And your money isn’t locked away.

You can withdraw extra money to pay for bills, holidays and other big ticket items whenever you need it.

Reversionary Pension

A reversionary pension is an income stream you set up with your superannuation that automatically continues to someone else (generally your spouse) when you die.

In effect, it’s a way of telling the trustee of your super fund what you want to happen with your super when you die – you’re telling them you want your pension to continue but to be paid to your spouse instead.

How Rich River Wealth can help:

  • Conduct a complete review of your financial situation

  • Recommend strategies to meet your retirement lifestyle goals.

  • Work with you to develop a new budget and investment plan to achieve your short-term and long term goals

  • Review and recommend wealth protection plans

  • Help you create or update your will

Rich River Wealth – Echuca Financial Planner

Contact Rich River Wealth today to book a chat and get you on the right track to grow your wealth!

  • 0400 33 66 44
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