Moving to the Sunshine Coast – how do I maximise income during retirement?

A common Sunshine Coast Financial Planning situation we have is people moving to the Sunshine Coast to retire after selling up elsewhere.  After purchasing a property there may well be a large lump sum to invest from selling investments.   Often we’ll recommend the superannuation environment for these funds due to the large degree of flexibility in the superannuation environment and the (generally) tax-free nature of superannuation.  There are a variety of ways to maximise superannuation contributions in order to secure retirement income as follows.  By your Sunshine Coast Wealth Management expert, Mike Beal.

1. Concessional Contributions (Before-tax): a. Employer Contributions: Ensure your employer is making Superannuation Guarantee (SG) contributions, which are currently 10% of your salary. You can negotiate with your employer to increase this rate. b. Salary Sacrifice: You can arrange with your employer to make additional contributions from your pre-tax salary, which can be advantageous as it reduces your taxable income. c. Personal Deductible Contributions: If you’re self-employed or not receiving SG contributions, you can make personal contributions and claim a tax deduction. This can be a way to boost your super while reducing your taxable income.  Generally this is up to $27.5k p.a.
2. Non-Concessional Contributions (After-tax): a. Voluntary Contributions: You can make personal, after-tax contributions to your superannuation fund. These are known as non-concessional contributions. There is an annual cap on non-concessional contributions, so be mindful of the limits. b. Government Co-contributions: If you earn less than a certain threshold, the Australian government may make additional contributions to your superannuation through the co-contribution scheme. Generally up to $110k p.a. per person.  Although you may be able to utilize ‘bring forward’ contributions.
3. Downsizer Contributions: If you’re over 65 and have sold your primary residence, you may be eligible to make downsizer contributions of up to $300,000 per person from the sale proceeds into your superannuation. This can be a valuable strategy for those looking to downsize in retirement.
4. Super Splitting: You can split your superannuation contributions with your spouse. This can help balance your superannuation savings and reduce tax in retirement.
5. Tax Strategies: Consider tax-effective strategies like transition-to-retirement (TTR) pensions or account-based pensions to manage your tax and access superannuation benefits in retirement.
6. Seek Professional Advice: It’s crucial to consult a financial advisor or tax specialist to tailor your superannuation strategy to your specific financial situation and retirement goals. They can help you maximize your contributions while staying compliant with superannuation rules and tax laws.
7. Stay Informed: Keep yourself updated on changes to superannuation rules and contribution limits. The government may adjust these limits from time to time.
8. Review Your Investment Options: Ensure that your superannuation investments align with your risk tolerance and retirement goals. Diversifying your investments can help grow your superannuation balance over time.

Remember that there are contribution caps and age-related rules, so it’s essential to receive expert advice from your Sunshine Coast Financial Planner Retirement specialists, Mike Beal Financial Planning. Your individual circumstances and goals will play a significant role in determining the most effective strategy for maximizing your superannuation contributions in Australia.