Frank is planning an early retirement for him and his wife, and he’s asked Noel Whittaker if his retirement income calculations are ‘on the money’.
My wife and I will turn 56 this year. My plan is for us both to retire at the age of 57 or 58.
We have $575,000 combined in superannuation. My wife contributes $11,200 into super each year and I contribute $19,200 each year. We own our house ($500,000 estimated value). We also have an investment account of $265,000, which we will use to top up our super, and we both have long service with our employment.
We hope or plan to retire and live on approximately $60,000 cash per year until we are 60 years of age and then use our super funds’ pension scheme to draw about $60,000 per year or more, depending on markets, until we reach the pension age of 67 for top up, depending on the amount allowed by the assets test.
Do you think my plan is viable? And would it be safer to have our super accounts with the same company and with the same amounts in each account during super pension stage? And/or government pension time? Is there any advantage to this? At the moment we are with Australian Super and Care Super.
A. Your plan is viable, but what the pension regulations will be when you reach pensionable age is another matter. This is why you are wise in boosting your finances before you retire. I don’t think there is any question of safety with the major superannuation funds, and by keeping the number of accounts to a minimum, you are saving on fees. Just make sure you check out the insurance position before you close down one fund and roll the balance to another.
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Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.