Robert's Retirement Blog

Planning for retirement, retiring then managing your finances in retirement isn’t always linear.

What I mean by that is sometimes when retirement is discussed, living expenses are worked out, income is setup and then sometimes people leave it as a set and forget.

That maybe the case for some people but especially in the recent years since 2020 we have seen inflation some years in Australia increase by over 7%. Now if you planned for an increase of let’s say 2-3% year on year. Your original plan is already outdated.

On one side though the general headline inflation might be 7% (which considers multiple different goods and services) but you may feel it more personally than 7%. I.e. your insurance premiums might have gone up by 20% and your weekly food shop by 15% amongst other increases greater than 7%.

It is important to consider how this affects you personally, it isn’t a reason to panic but more just plan ahead, rarely when someone starts out in retirement vs 15 + years in retirement are they spending as much as when they start. So, it may be the case that you can spend more in your early years and then when you are older, you might not be as active with travelling or you may only need one car instead of two if you are a couple. …

It is a common misconception that to access a transition to retirement income stream, you need to reduce working hours. Although this can be a viable strategy, it isn’t a necessity.

Transition to retirement income streams can be a valuable way to do a range of things in the lead up to retirement provided you meet the criteria to set one up and it is actually beneficial in your circumstances to do so. Ways to use a transition to retirement income stream can include:

· Assisting in debt reduction.

· Helping to cover the costs of renovations (like installing solar panels to reduce electricity costs in retirement).

· Helping to fund your cash flow to maximise the amount of tax affective contributions to super you can make.

· Or you can use them “traditionally” i.e. reducing 2 days a week work then “topping up” the lost income with funds from your transition to retirement income stream.

You generally can only access a maximum of 10% each financial year (and a minimum of 4%). Depending on which fund you are with though you may be able to take your requested payment spread out on a fortnightly or monthly basis or even as a once off annual amount.

This is a myth and I hear this getting mentioning quite often when people think having SuperSA Triple S (being a SA Government fund) is safer than other super funds. Just because it is state government run – it does not provide any extra security with how your funds are invested and the risks compared to any other super fund that invests money on your behalf.

Ultimately when I hear people saying “safe” they are referring to the chance of losing capital value of their investments. When in reality what it really comes down to is how you invest your superannuation fund in terms of the types of assets you carry which will determine how “safe” your fund will be. For example if you compare SuperSA Triple S and an investment within it that carries lots of shares compared to another industry fund with an investment that carries a lot of shares, being a government fund it doesn’t provide any additional security and your performance and risks of losing or gaining money comes down to what your invested in.

SuperSA does have other funds though (some older schemes) which have a defined benefit value (usually calculation based with things like length of service and salary) – these funds are maybe where the rumours start of SuperSA being “safe” …

Well, it isn’t exactly a limit, it is more essentially saying that balances in superannuation for an individual above $3 million will incur an additional tax of 15% on earnings above the $3 million you hold. Currently, the tax rate is 15% so this will effectively increase it to 30% on earnings for balances above $3 million.

This was announced firstly I believe back in February 2023 by Jim Chalmers (see article here).

It is planned to take effect from 1st of July 2025 but has not been legislated yet at the time of writing.

There are a few concerns about the proposal which include, it is set to tax also the portion of “unrealised gains” the superannuation fund has above $3 million. Whereas currently superannuation capital gains are taxed when the event happens, i.e. sale of shares or property. The proposed legislation is saying even if you don’t sell the shares, they will be applying a tax on the unrealised growth that you haven’t sold yet. This can be problematic for a few obvious reasons as funds might not have the money to pay the tax if they haven’t sold the asset!

There is also no proposed indexation on the $3 million dollars. Now that might seem fine, but the argument is for people my age or younger, having over $3 million …

This blog post I wrote is just to raise awareness of what is happening in the superannuation provider space with HESTA. Like a lot of low-cost industry funds, they utilise outsource providers to keep costs down to provide savings to members. In this case they are currently using a company called MUFG and are now moving to a company called GROW Inc to do a lot of their administration.

This move and change will see a limited service period that has started mid April 2025 and is expected to finalise at the start of June 2025. Off the top of my head (so don’t quote me), since I have been in the industry over 8 years, I don’t recall a super fund every having such a large, limited service period (except for when a merge of 2 super funds have taken place). This however isn’t a merger, rather just a change in who does their back end work.

During this time, members and financial advisers like myself are unable to have online access to view current account details including things like balances of accounts or to check if contributions have been applied correctly in an account.

There are a few things that still to me seem a little bit hard to understand, for example if you would like to make investment changes – it is a bit unclear of how …

Many people when selling an investment property might consider concessional contributions to super to reduce potential capital gains tax. The limits for these contributions aren’t too generous, however what if you have considerable left over funds? Well, provided you haven’t used a “downsizer contribution” previously – you may be able to take advantage of these rules.

The “downsizer contribution” was first made available in 2018. The main purpose was to allow Australian’s 65 years and older (which the age is now 55 years plus) to sell your principal residence that you have lived in for at least 10 years and contribute any surplus up to $300,000 (singles) or $300,000 each (couples) into superannuation.

The idea is to encourage people to sell their “big” family home, move to something smaller and free up capital to help support their retirement. Even though it is designed in principle for this reason - you might have had a home you lived in from 2010 – 2020 and then it has since become an investment property. When you sell this investment property, provided you meet all the other criteria and haven’t previously used the downsizer contribution, you can still use the downsizer contribution rules even though it isn’t your current …

For those on government entitlements like the Age Pension, generally outside of your superannuation – your home is your biggest asset. But what happens to your Age Pension when it comes time to sell your home and downsize? Downsizing doesn’t happen overnight so does your Age Pension get wiped out whilst you are in between houses? Well, in some cases no and here’s why.

The Government will give you for those selling from the 1st of Jan 2023 onwards up to 24 months (provided it is your intention to become a homeowner again) an exemption period where they WON’T asses the asset value of your property up to the amount you intend to purchase another home for. I.e. your current home is worth $2 million and you sell then only plan to purchase for $1.5 million. Only the $1.5 million is exempt NOT the whole $2 million. Noting that the actual asset value will still have an impact on your income test i.e. it will be deemed.

This can be very handy in keeping government entitlements as you might be staying with family for a period of time until your next home is ready – or you might be temporarily renting until you are ready to move in. Now, the rules get very tricky here and it is important to seek specialised advice as in some instances as you …

An annuity is generally known as an income that is guaranteed and pays you for a certain number of years or the rest of your life.

However, in the recent number of years we have seen quite a bit of innovation in the “traditional annuity” space. For example, if you start an annuity with a provider with $100,000, it might pay you $5,000 for the rest of your life (all the payment amounts are dependant on your age, I.e. the older you are and closer to statistical life expectancy, the higher the payment and vice versa for the younger you are).

Some payments might be guaranteed, and others might not be in terms of they might fluctuate with investment markets. So, some years it might be positive and your payments will increase and other years it might be negative such that your payments will decrease.

Another term for an annuity that you might hear is a lifetime income stream or a fixed-term pension but regardless of what the product is called, every provider I know of in Australia is very different in how they are structured, and it is important to get specialised advice from a licensed financial planner around this.

My own views as to why we are seeing more annuity style products come up in the marketplace today is the government is …

It is always a consideration of health being number one and then finances come second with when you decide to retire and if you can do it a bit earlier. In this article I am going to look at a recent client situation where Client A who is 65 and Client B is 67 are a married couple living together and how when Client A is working still earning $30,000 p.a. and how that affect’s Client B’s age pension entitlement.

Currently when Client A is earning $30,000 p.a. That will mean that Client B is only eligible for a total of approximately $17,436 p.a. of Age Pension instead of the full Age Pension being $22,518 p.a.

That means currently their total household income is $30,000 p.a. (Client A’s work) + $17,436 (Client B’s Age Pension) = $47,436 p.a.

Noting this doesn’t include any superannuation income streams I have setup for them to top up their income. I am just trying to focus on work income and Centrelink entitlements in this example.

Now Client A decided to retire early which dropped their income to $0. They then moved on to what is called the “JobSeeker” entitlement from Centrelink. This has very different rules for different age categories, it is also means tested. For Australian’s over the age of 60 – to be eligible you have to …

Superannuation is a choice and like anything that we can choose, consumers (including me!) like to research things online before we spend money on anything. One thing that consumers do is compare returns from month to month, year to year, 10 years to 10 years of various super funds. Obviously returns is one of the key reasons to invest your money (i.e. your taking risk on your money and you want to make sure that whoever is looking after it is giving you something back in return that is the same if not better than others!).

However, it shouldn’t be the only deciding factor and returns quoted can differ from fund to fund making it harder to compare. One fund I deal with a lot in South Australia is SuperSA Triple S, now consumers get caught sometimes comparing returns to other super funds (and when I say other super funds I am referring to a standard accumulation where concessional contributions, earnings etc are taxed on the way in). SuperSA Triple S is different where employer contributions and earnings don’t get taxed until the end i.e. upon roll out or retirement for example.

What is the tax rate? Well, it can be up to 15% on unrealised gains and income. So this means that looking at SuperSA Triple S and their returns, you are …