If you were working towards a retirement date and Coronavirus has meant a change of plans, it can be hard to move the goal posts. Could you gradually reduce your hours to make stretching out your years at work more do-able?
If your work is stressful, consider whether you could reduce or change your responsibilities. For jobs that are physically demanding, do you have the option to shift into a role that is less hands-on – such as training others, workplace safety or compliance monitoring?
Or, if the idea of extending out your retirement date is unappealing, another option could be taking some time off. If you have accrued a lot of annual or long-service leave, then the financial impact may be negligible.
Three smart super strategies
Here are some strategies that can boost your super or minimise your tax in your final years of working.
- Make additional contributions. You can add more to your super using either your before-tax salary or your take-home pay. The most common ways to do this are by salary sacrificing, making a tax-deductible personal contribution, using some of your unused concessional cap from previous financial years in a catch-up contribution, or using the bring-forward rule to make a large, one-off contribution to your super.
- Transition-to-retirement (TTR) strategy. A TTR strategy lets you access some of your super while you’re still working. It’s only available for people who are aged 60 or above. The most common way to use this strategy is to continue working full-time and salary sacrificing into super while drawing a tax-free income from your TTR pension. So while you’re growing your super you’re also paying less tax in the lead up to retirement.
- Review your asset allocation: Seek financial advice to review how your super is being invested to meet your retirement needs.
Try a different kind of work
If you’re not enjoying your work, or your work has finished up, then consider lifting your gaze towards something new:
Learn. Flexible learning options have never been more accessible or plentiful. They can also be very affordable, with low cost or free courses bringing easy learning within reach. The time it will take you to complete a course is a small investment for the benefit of undertaking more satisfying work.
Start a business. Business ownership is a popular option for 8% of Australians aged between 50 and 64. What’s more, if you start a business as an older person, you have a better chance of success than if you’d started at an earlier stage of life. This is because you’ve accumulated valuable work experience, built broad and deep professional networks, and developed life skills, wisdom and resilience that could help your business succeed. It’s important to remember that starting a business requires upfront capital investment and there are risks involved in running a business, so it’s best to seek professional advice before you do so.
Career coaching. If you want to change what you do for work, a career coach can help you explore your options and advise you on your next step.
Get a sounding board
When you have plans in place, it is unsettling when they are disrupted. Your financial adviser can explore your options with you, advise you on the impact of different strategies and recommend away forward. So it’s important to check in with them, especially before you make any changes to your super.
Source: Colonial First State
