Before compulsory superannuation was introduced, only a select part of the Australian workforce had access to superannuation and most workers believed the aged pension would be sufficient for their retirement needs. People knew little about investments and didn’t have any real strategy for retirement. Now that most workers have superannuation accounts, there is a greater interest in retirement planning and how investments can help to build a nest egg.
Nobody wants to work their entire lives and enter retirement without sufficient funds to enjoy the fruits of their labours. There are so many opportunities and leisure pursuits designed for retirees that there is no excuse to stay home being bored. The only barrier to getting out and about to enjoy these opportunities is lack of funds. For those facing this prospect, the best time to remedy this situation is now.
Accept Expert Advice and Restructure Assets
Finding someone with expertise in retirement planning is the first port of call and a visit to your accountant is an excellent place to start. Accountants are trained professionals in money management and assist their clients to structure their financial affairs to suit their long-term goals. Retirement is an essential long-term goal and although it may be many years away, sound planning and investing now should ensure prosperity rather than austerity.
An accountant will assess the value of the assets currently held by the client and determine if they are achieving the maximum return. The examination will include their current superannuation fund’s performance and structure, options for salary sacrificing to reduce tax and increase the employee contribution, and legal tax minimisation strategies on retirement investments. These are just a few of the options available that will result in the development of a formal retirement strategy.
Use Current Taxation Laws to Advantage
Accounting professionals are fully conversant with the taxation laws and they keep up-to-date with regular changes. These often happen in the Federal budget and are buried in the detail of the budget papers. Accountants who specialise in retirement planning examine the budget thoroughly and look for changes to superannuation rules and other issues relevant to retirement. They can then advise their clients if their existing retirement plans should be modified.
Your assets serve you best when they are put to work to earn a better return. This could include using the equity in a home loan to buy an investment property and take advantage of negative gearing. It could mean directing your superannuation fund to change the mix of investments to give a higher return or placing cash into a high interest earning account. Whatever the strategy, your accountant will be able to source up-to-date information and give advice.
Retirement should be something in the distance that is anticipated with pleasure, while still enjoying the challenges of work and career. For those who have no retirement funds to speak of, the only alternative is to remain in the workforce for much longer than they want to. Getting a retirement plan together now is the best way to build that nest egg.
