For most Australians, their 60s is the decade that marks retirement.

For some this means a graceful slide into a fulfilling life of leisure, enjoying the fruits of a lifetime of hard work.

However, for many it means a substantial drop in income and living standards.

So how can you make the most of the last few years of work before taking that big step into retirement? 

Are we there yet?

Allowing for future age pension entitlement, the Association of Superannuation Funds of Australia, ASFA, calculates that a couple will need savings of $640,000 at retirement to maintain a ‘comfortable lifestyle’. 

ASFA equates ‘comfortable’ to be an annual income of $61,522.

How are we tracking? 

In 2015-2016, 50 percent of men aged 60 to 64 had super balances of less than $110,000. 

For women the figure was a more alarming $36,000 – not even enough to provide a single person with a ‘modest’ lifestyle. 

ASFA estimates that to upgrade from a ‘pension only’ to a ‘modest’ lifestyle would require a retirement nest egg of $70,000.

Last-minute lift

If your super is looking a little on the thin side there are a few ways to give it a boost before retirement. 

• Make the most of your concessional contributions cap. Total concessional contributions must not exceed $25,000 a year, although you might be able to carry forward any unused portion of this cap for up to five years.

• Review your investment strategy. A common view is that as we near retirement our investments should be shifted to the conservative end of the risk-and-return spectrum. However, in an age of low returns and longer life expectancies, some growth assets might be required to provide the returns that will be necessary to support a long and comfortable retirement.

• Make non-concessional contributions. If you have substantial funds outside super it might be worthwhile transferring them into the concessionally taxed super environment. 

• The 60s is often a time for home downsizing. This can free up some cash to help with retirement. The ‘downsizer contribution’ allows a couple to jointly contribute up to $600,000 to superannuation without it counting towards their non-concessional contributions caps.

Get it right

This important decade is when you will make the key decisions that will determine your quality of life in retirement. Those decisions are both numerous and complex. 

Good quality, knowledgeable advice is critical, and wherever you are on your path to retirement, now is always the best time to talk to your licensed financial adviser. 

The entire February 26, 2020 edition of The Weekly Advertiser is available online. READ IT HERE!

The entire February 26,, 2019 edition of AgLife is available online. READ IT HERE!