Is your retirement income on track?

We look at many factors to help you determine if your retirement income is on track. We:

  • Look at your existing assets (both inside and outside super)
  • Estimate your projected retirement assets based on when you want to stop working
  • Your current salary.

The difference between what we estimate you will get and what you want to achieve is your ‘retirement gap’. We then look at strategies to close the gap.

Do you have a retirement gap?

If you find that you have a retirement gap, there are a few options available to you including:

Increase your superannuation contributions

This can consist of concessional or non-concessional contributions. The benefits of this approach is the highly tax advantaged structure of superannuation, particularly for concessional contributions. There are restrictions however, in terms of the amount of contributions you can make and when you can access your super. If you want to draw down an income before your preservation age (when you are generally able to access your super) this strategy may not work for you.

Invest in property

This approach also has strong tax benefits without the restrictions on when you can access your money (unlike super). It does however include restrictions on entry. Lenders require minimum levels of equity and income in order to fund the purchase. In many cases property is a long term investment. Several years of rental growth are required, at high levels of borrowing, before the property generates income after costs.

Invest in shares

Shares are traditionally one of the strongest types of investment in terms of growth, and are widely considered an excellent way to generate tax efficient income hedged for inflation. A gearing strategy can also provide tax benefit. This asset type is, however, subject to high levels of volatility which can in turn lead to problems with gearing ratios. Accessibility is no issue and investments can be for any amount.

Reduce your expectations

The easiest way to bridge the gap is to bring your expectations in line with expected results. This approach may be forced on an individual once the other options have been rejected or if not enough time or resources are available to boost assets with an alternative strategy.
What we find the most critical thing with any retirement strategy is the importance of starting early. Milestone is able to assess whether you have a retirement gap and what strategies you can use to close the gap.

Contact Milestone Financial to work out if you have a retirement gap. Talk to us today.