Retirement made easy. Helping you achieve your retirement goals. rest.com.au/restpension

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1 Retirement made easy Helping you achieve your retirement goals rest.com.au/restpension

2 Helping you achieve your retirement goals As you near retirement you probably have a number of questions about how to reach your financial goals. This brochure should help answer some of those questions and give you some guidance when it comes to planning for the next exciting stage in your life. If you have any questions or want to talk through anything relating to your super or retirement please call us on REST Industry Super REST Industry Super is one of Australia s largest super funds trusted by around 2 million members^ nearly 1 in 6 working Australians is a REST member *. Our mission is to improve the retirement outcomes of members throughout their lives. We are run only to benefit members and our scale allows us to negotiate better rates for our members for administration and investment management. We also do not pay commissions to financial advisers or dividends to shareholders. Whilst we are an industry super fund, anyone can join REST no matter what industry you work in. We are proud to be recognised by winning a number of industry awards: Pension of the Year 2014 and SuperRatings Pension of the Year 2016 Finalist - SuperRatings Platinum Pension SuperRatings Money magazine s 2014 and 2015 Best of the Best award for Best Pension Fund Manager Chant West 2014 and 2015 Pension of the Year Finalist ^ As at 30 June 2015 * Number of working Australian sourced from Australian Bureau of Statistics, Labour force, Australia, (cat. no ), January Awards and ratings are only one factor you should consider when making decisions on your super. Further information regarding these awards can be found at rest.com.au/ourawards. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite REST products. Go to superratings.com.au for details of its ratings criteria. For further information about the methodology used by Chant West, see chantwest.com.au Retirement made easy 2

3 Retirement is one of the most important stages in your life Retirement planning Although retirement may not be in your immediate future, REST is committed to helping you make the most out of your super. So when the time comes, you can enjoy the retirement lifestyle you would like. When planning for retirement, you will need to consider when you want to retire, how long you will be in retirement and how much money you will need for a comfortable retirement. Is there a legal age to retire? Generally, there is no legal age at which you must retire. Some industries and employment contracts specify a retirement age but these do not affect most Australians. However, there is an age at which you can access your super. When can I access my super? To encourage Australians to save for retirement, the government restricts when you can access your super. Generally you can access your super when you reach your preservation age and have permanently retired. Your preservation age is determined by your date of birth. Date of birth Preservation age Before 1 July July June July June July June July June From 1 July How much will I need in retirement? How much money you ll need in retirement is personal and depends on the lifestyle choices you make. Super can be an important source of income when you retire (together with other investments and, if eligible, the government Age Pension). According to the Association of Superannuation Funds of Australia (ASFA), a single person needs an annual expenditure of $43,184 and a couple needs $59,236 to live comfortably in retirement*. To find out how much super you may have at retirement, you can use our super and retirement calculator at rest.com.au/ calculators * ASFA Retirement Standard December quarter 2015 national. The figures in each case assume that the retiree(s) own their own home, aged around 65, are relatively healthy and relate to expenditure by the household. Single calculations are based on female figures. 3 Retirement made easy 4

4 Budgets for various households and living standards The ASFA table below shows the weekly and annual budget for a single or couple, to fund a modest or comfortable lifestyle in retirement. Your pension may bridge the gap between what you may qualify for through the Age Pension and the lifestyle you d like to achieve in retirement. Expenditure items Modest lifestyle - single Comfortable lifestyle - single Modest lifestyle - couple Comfortable lifestyle - couple Housing - ongoing only $73.38 $85.05 $70.44 $98.59 Energy $41.04 $41.65 $54.51 $56.48 Food $77.42 $ $ $ Communications $8.74 $24.01 $15.29 $30.56 Household goods and services Clothing and footwear $27.20 $76.51 $36.88 $89.63 $17.78 $38.48 $28.86 $57.72 Transport $92.62 $ $95.24 $ Health services $42.41 $84.13 $81.84 $ Leisure $75.81 $ $ $ Total per week $ $ $ $1, Total per year $23,797 $43,184 $34,226 $59,236 Source: ASFA Retirement Standard, December quarter 2015 national. Updated quarterly to reflect inflation. The figures in each case assume that the retiree(s) own their own home, aged around 65, are relatively healthy and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. 5

5 Ways to boost your super Strategy Building your wealth The compulsory payments your employer makes into your super are a great start to saving for your retirement. However, they may not be enough to fund the lifestyle you would like when you retire. Simple ways to boost your super before you retire There are some simple, practical ways to get your super working harder, as you ll see in the table below. Depending on your situation, a financial adviser can help you determine which strategy or combination of strategies work best for you. Ways to boost your super Find lost super Save on fees Strategy For more information about building your wealth (including case studies and eligibility criteria) visit rest.com.au/grow If you have changed jobs, address or your name, you may have lost or unclaimed super. To check if you have any lost or unclaimed super, use the SuperSeeker tool on the ATO website (ato.gov.au/superseeker). Combine your super accounts If you ve had more than one job chances are you have more than one super account, paying more than one set of fees, which could add up over time. Combine them now and you could be sitting on more money when you really need it. You ll also enjoy the benefits of less paperwork and it may be easier to keep an eye on your money because it s all in the one place. Current REST members can save time and consolidate online via MemberAccess. Before consolidating your super, you should consider the implications of doing so, including whether your other superannuation funds charge an exit fee and any loss of insurance cover or other benefits in your other funds that may apply. Take advantage of contributions from the Government Reduce your income tax without affecting your take home pay Make voluntary contributions Lower tax rates on investment earnings Super co-contribution If you re eligible and make a personal after-tax contribution into your super by 30 June each year, the government will match part of your contributions up to a certain amount after you lodge your tax return for the financial year. To find out more about eligibility visit rest.com.au/grow. Low income superannuation contribution (LISC) Unlike the co-contribution, you do not have to make a personal contribution to be eligible for a LISC payment. If you are a permanent resident and earn under $37,000 or less per annum, the Government will refund you some of the tax you paid on your employer contributions (15% contribution tax) into your super up to a maximum of $500 each financial year. The LISC will be abolished from 1 July Transition to retirement If you ve reached your preservation age and still working, you could boost your super and save on tax without affecting your take home pay by using a transition to retirement strategy (see page 12). After-tax contributions Making additional contributions from your post-tax salary can be an effective way to grow your super. After-tax contributions, also called non-concessional contributions, are capped at $180,000 per year for the financial year. If you are under age 65, you can contribute up to $540,000 ($180,000 x 3) in after-tax contributions in a financial year by bringing forward two year s worth of contributions. If you go over the after-tax contribution cap, you can choose to withdraw the excess non-concessional contributions, and any earnings. These earnings will be included in your income tax assessment. If you choose not to withdraw your excess contributions, they will be taxed at the top marginal rate. Salary sacrifice Rather than contributing to your super after-tax, you may be able to set up an arrangement with your employer where you can elect to sacrifice some of your pay directly into super pre-income tax. In super, your salary sacrifice contribution will be taxed at 15%, which may give you tax savings compared to your marginal tax rate. Investment earnings within super are only subject to tax of up to 15% compared to non-super investments which are generally taxed at your marginal tax rate. Investment earnings on account-based income streams such as REST Pension are not subject to tax. Note: Fees are only one factor you should consider when making decisions on your super. The information in this brochure is based on laws current as at 1 March 2016 and may change. Retirement made easy 8

6 Ready to retire Generally you can access your super when you have permanently retired from work and have reached your preservation age. Once you have access to your super, you can convert it to an account-based pension, take it as a lump sum payout or a combination of the two. While there are benefits to both payment types, an account-based pension could be a better option for many people because it offers tax advantages, and assists in providing a regular income in retirement. Depending on all your income and assets, you may also be eligible for a government pension to supplement your account-based pension. What is an account-based pension? An account-based pension provides you with a regular income in retirement. It can help you: manage your income and spending with flexible payment options benefit from no tax applied on the earnings of your pension investments and no tax on the pension payments once you re aged 60 or over have access to a lump sum payment from your pension account supplement any Department of Human Services benefits you may be entitled to. REST offers a low fee account-based pension (see below). Introducing REST Pension REST offers an award winning account-based pension that can be a tax-effective way of providing you with a regular income in retirement, or if you re aged 55 or over and still working. In 2015, REST Pension was awarded Pension of the Year 2015 from SuperRatings and Money magazine s 2015 Best of the Best award for Best Pension Fund Manager. The government Age Pension is a safety net for older Australians who do not have enough super or investments to fund their retirement. At most it is $ per week for a single and $ per week for a couple combined*. For more information about the government Age Pension visit humanservices.gov.au/agepension * You may be paid an additional Pension Supplement and/or Energy Supplement amount on top of this. Figures are correct as at 18 February REST Pension features, at a glance It s easy to join REST Pension you need a minimum of $10,000 to invest. To find out if you re eligible to invest, please read the REST Pension Product Disclosure Statement (PDS) for more information. REST offers a competitive and simple fee structure as one of Australia s largest profit-to-members industry super funds, we offer competitive fees and we also pay no commissions to financial advisers, planners or accountants. How your money is invested is your choice you can choose to mix and match our 13 investment options, or opt for the default Balanced investment option. For more information on investing with REST and our investment options, read our Pension PDS. Flexible income payments you can choose to receive pension payments twice a month, once a month, quarterly, twice a year or yearly. You can change your payment amount at any time (subject to government limits). Regular reporting to help manage your investment you ll receive two statements each year, showing your account balance, asset allocation, fees and charges that have been deducted from your account and a payment summary. Friendly, personalised service and easy access to up-to-date information on your investments online, over the phone or face-to-face. The Department of Human Services (DHS) and the Age Pension One of the roles of Centrelink which is part of the DHS is to provide payments and support for retirees. From 1 January 2015 account-based income streams such as REST Pension are included in the deeming rules also known as the income test. If your income stream commenced before 1 January 2015 and you satisfy other conditions, your income stream may be exempt from deeming. To be eligible for the Age Pension, you must satisfy certain requirements such as be an Australian resident, be a certain age and also satisfy the income test (deeming) and the asset test (your REST Pension is included in the asset test)^. ^ We recommend you seek independent advice from a licensed financial adviser or the Department of Human Services as to how an account-based pension may affect your entitlement to social security benefits. For more information about REST Pension, contact us: rest.com.au/restpension , Monday to Friday 8am 6pm 9 Retirement made easy 10

7 Transition to retirement If you re not quite ready to fully retire, but might be looking to reduce your work hours or boost your super in the lead up to retirement, then a Transition to Retirement Pension may be an option for you. What is a transition to retirement pension? A transition to retirement pension allows you to convert your super into an income stream if you have reached your preservation age (refer to the table on page 3 to determine your preservation age). It is designed to supplement your income in the later years of your working life before you retire. A transition to retirement pension may suit you if: You want to boost your super in the lead up to retirement via a salary sacrifice arrangement with your employer. You d like to work part-time but maintain the same take-home pay. What are the benefits? Reduce the amount of income tax you pay. Salary Sacrifice contributions! to your super account (made under the concessional contribution limit) are taxed at 15% rather than your marginal tax rate. If you re aged 60 or over, your pension payments are tax-free. If you re aged 55 to 59, your pension payments are subject to income tax. However, a 15% tax offset may be available. Investment earnings on your pension are tax-free. Allows you to supplement income from other sources whilst continuing to work. For more information about transitioning to retirement (including case studies) visit rest.com.au/ttr! An additional 15% tax may apply to concessional contributions for high income earners. Retirement made easy 12

8 Compare REST Pension Whether you are already retired or approaching retirement REST offers a range of benefits low fees competitive long-term returns no commission to financial advisers or dividends to shareholders award winning pension fund. With the AppleCheck comparison tool, produced by research house Chant West, you can compare REST s low fees and investment performance with over 150 super funds. This free report gives you: an overview of the fund(s) a case study that shows total costs investment options available and how they are performing a summary of services available to members Chant West s rating of the fund(s). Check it out here rest.com.au/comparerest Financial advice Financial advice can help you take control of your wealth, especially at important turning points in your life such as retirement. Consider your financial goals When setting goals, it s important to ask yourself the following questions. What lifestyle do you want to lead? What are your priorities in life? What do you want to achieve financially? Who depends on you financially and what do you want to provide for them? Get appropriate financial advice Different people seek advice for different reasons. A financial adviser can help you take a structured approach to achieving your financial goals. They will consider your objectives, financial situation and needs, then recommend strategies and products to suit you. Financial coaching from Money Solutions If you don t already have a financial adviser, REST can put you in touch with Money Solutions*. Money Solutions is a team of licenced financial advisers who can assist you to develop a plan and implement strategies for your super, such as savings on tax and making an investment choice. This could help boost your super in the lead up to retirement. Note: Ratings are only one factor to take into account when deciding where to invest your super. Past performance is not indicative of future performance. * Money Solutions Pty Limited ABN , AFSL No Money Solutions personnel are not representatives of the Trustee. Any financial product advice given by Money Solutions is provided under the Money Solutions AFSL. The Trustee does not accept liability for any loss or damage incurred by any person as a result of using products or services provided by Money Solutions. 13 Retirement made easy 14

9 To find out more about REST Pension or a transition to retirement strategy, contact us. rest.com.au/restpension Please call between 8am-6pm Monday to Friday REST Industry Super Locked Bag 5042, Parramatta NSW 2124 This material contains general advice which has been prepared without taking into account your objectives, financial situation or needs. Before making a decision based on this advice or deciding whether to acquire or hold a product, you should consider its appropriateness having regard to your objectives, financial situation and needs. You should read the Product Disclosure Statement which is available from rest.com.au or by calling before making any decision about the product. When you become a member of REST Pension, you join the Retail Employees Superannuation Trust ABN , issued by the Trustee Retail Employees Superannuation Pty Ltd ABN , AFSL Registered office: Level 7, 50 Carrington Street, Sydney NSW /16 ISS4