ClearView Retirement Solutions is urging women over the age of 55 to look at ways to bridge the retirement savings gap through the use of pre-retirement pensions.
A recent report by the Association of Superannuation Funds of Australia (ASFA)* has found women on average will accumulate approximately half the amount of superannuation of their male counterparts ($43,000 compared to $78,700). According to ClearView, depending on individual circumstances, a ‘pre-retirement pension’ offers women who are 55 or over and still working the ability to significantly boost retirement savings without compromising present incomes.
This may be achieved by increasing the proportion of their regular income that is salary sacrificed into superannuation, while drawing a tax-advantaged income stream from their existing super, to ‘top-up’ their reduced salary. In simple terms, this can allow them to grow their super even faster, without giving up a cent of their current income. And, despite beliefs to the contrary, this approach is not just for ‘the top end of town’. This strategy can be equally valuable to those earning an average salary and with modest existing super balances. Whilst the concept of accessing your super early as a means of growing it may seem counter-intuitive, the tax treatment of superannuation and a product called a pre-retirement pension could make it possible.
If you would like to receive regular updates on relevant changes and opportunities that could affect your retirement plans, join the ClearView Retirement Outlook Program to stay up-to-date with the latest information around superannuation, tax and Centrelink. Learn more about ClearView or call 132 976
* ASFA: Why a woman can’t be more like a man – gender differences in retirement savings; November 2004. Any advice in this material is general advice only and does not take into account your individual objectives, financial situation or needs. Before acting on it, you should consider the appropriateness of it taking into account your personal circumstances.