Planning for retirement

Transcription

1 Planning for retirement 1

2 Disclaimer This presentation contains general advice current as at April 2016 and has been prepared without taking account of your objectives, financial situation or needs. Before making any decision about our products based on this information, consider how appropriate it is for your own objectives, financial situation and needs and consider the Product Disclosure Statement (PDS) available from us before making any decision about whether to acquire or to continue to invest in the product. REST has no relationships that might influence our advice to you. REST does not pay or receive commissions. When you become a member of REST you join the Retail Employees Superannuation Trust ABN Acumen, REST Super, REST Select, REST Corporate and REST Pension are issued by Retail Employees Superannuation Pty Limited, ABN , AFSL Registered office: Level 7, 50 Carrington Street, Sydney NSW Planning for retirement 2

3 Tonight s program to help make you aware of some options to achieve results Introducing REST and Money Solutions 1. Where are you now? 2. Options to boost your super 3. Taking action so that you can make informed decisions about your super and your future Planning for retirement 3

4 REST Industry Super One of the largest funds in Australia with around 2 million members and around $38^ billion funds under management Our mission is to improve the retirement outcomes of our members throughout their lives ^ As at 31 December 2015 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 Planning for retirement 4

5 Overview of REST as at 31 December 2015 * Current as at 31 December 2015 ^ Number of working Australian sourced from Australian Bureau of Statistics, 2015, Labour force, Australia, (cat. no ), December 2015 Planning for retirement 5

6 Core Strategy performance (as at March 2016) 10 year per annum 7 year per annum 5 year per annum 3 year per annum 1 year Core Strategy 6.62% 9.45% 7.93% 8.47% -1.19% Median 5.04% 8.60% 7.19% 8.00% -1.19% Relative performance compared to median balanced options Ranking against balanced options +1.58% +0.85% +0.74% +0.47% 0.00% 1/44 8/49 10/50 18/50 26/50 SuperRatings Fund Crediting Rate Survey March 2016, Median return for SR50 Balanced (60-76) Index. Returns are net of investment fees, tax and implicit assetbased administration fees. Explicit fees such as fixed dollar administration fees, exit fees, contribution fees and switching fees are excluded. Returns for periods greater than one year returns have been annualised. Past performance is not an indicator of future performance. Ratings, awards or investment returns are only some of the factors that you should consider when deciding how to invest your super. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to for details of its ratings criteria. Planning for retirement 6

7 Delivering real net benefits to our members How $100,000 in REST Core Strategy compares to the Median fund in the SR 50 Balanced (60-76) Index and Worst Performing Balanced Fund March 2006 to March 2016* $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $184,332 $159,363 $122,795 $100,000 $80,000 $60,000 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 SR Balanced (60-76) Index REST - Core Strategy Worst Balanced Fund Source: SuperRatings + These returns do not allow for inflation. * Source: SuperRatings Fund Crediting Rate Survey SR 50 Balanced (60-76) Index, March Returns are net of investment fees, tax and implicit asset-based administration fees. Explicit fees such as fixed dollar administration fees, exit fees, contribution fees and switching fees are excluded. Ratings or investment returns are only one factor that you should consider when deciding how to invest your super. Past performance is not an indicator of future performance. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to superratings.com.au for details of its ratings criteria. Planning for retirement 7

8 Core Strategy asset allocation at October 2015 Asset type Range Benchmark Defensive 22% Australian shares 15-45% 19% Overseas shares 5-35% 29% Property 0-25% 11% Infrastructure 0-15% 6% Growth alternatives 0-25% 13% Total growth assets 25-85% 78% Defensive alternatives 0-25% 10% Bonds 5-75% 6% Cash securities 0-25% 6% Total defensive assets 15-75% 22% Planning for retirement 8

9 Considering investment options REST offers 13 different investment options Depends on your goals, time frame and tolerance for risk Try the Investor Profile Quiz at rest.com.au/calculator Learn more at rest.com.au/investment Money Solutions* can provide a more detailed investor profile *Money Solutions Pty Ltd (AFSL ). Money Solutions personnel are not representatives of the REST 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. Planning for retirement 9

10 Step 1 Planning for Retirement Planning for retirement 10

11 Have you ever thought Will I have enough money for retirement? I m concerned about financial markets I want to know my money is safe and secure What age pension am I entitled to? I feel like I could be doing better with my money It s all too complicated I don t know who to trust or where to start You are not alone Planning for retirement 11

12 Government Age Pension Maximum* Single Couple (each) Fortnightly $ $ Annual $20, $15, ($31, combined) To qualify for the Age Pension you must satisfy age and residence requirements Asset and income tests apply and may determine the amount you receive A Pension Supplement and/or Energy Supplement may also be available in addition to this * Figures are correct as at 31 March 2016 and are updated each March and September. Source: Department of Human Services. Excludes transitional arrangements for certain pensioners receiving part pensions as at 19 September Planning for retirement 12

13 How much is enough? Average household budgets per year in retirement^ (aged around 65): Modest Comfortable Single Couple Single Couple Total per year $23,797 $34,226 $43,184 $59,236 The above figures apply for those aged around 65. Different figures apply to those aged around 85 and are available on ASFA website. Modest retirement: Better than the Age Pension, but still only able to afford fairly basic activities Comfortable retirement: Regular leisure activities Private health insurance Reasonable car Good clothes Electronic equipment One annual holiday in Australia ^ Source: Association of Superannuation Funds of Australia (ASFA) Retirement Standard, December quarter 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. Planning for retirement 13

14 Retirement savings needed Annual expenditures needed for a comfortable lifestyle as at December 2015 is $43,184 for a single and $59,236 for a couple^ Lump sum needed at retirement to support a comfortable lifestyle + (assumes receipt of part Age Pension) Couple $640,000 Single person $545,000 + Source: Association of Superannuation Funds of Australia (ASFA) Retirement Standard, December quarter The lump sums required for a comfortable retirement assume that retiree(s) will draw down all their capital, and receive a part Age Pension. Figures in today s dollars using 3.75% AWE as a deflator and an assumed investment earning rate of 7 per cent. Based on the means test for the Age Pension in effect from 1 January Planning for retirement 14

15 Step 2 Options to help boost your super Planning for retirement 15

16 Super at a glance Employer contributions Personal contributions Investment earnings (positive or negative) In Your super Less Management costs*, insurance fees and taxes Out Lump sum withdrawal Regular payments via a pension account during your retirement * Includes Investment fee, Administration fee, Buy/sell spread. Other fees and costs may apply depending on your circumstances. Please refer to the relevant PDS for more information. Planning for retirement 16

17 Getting yourself retirement ready Personal contributions (voluntary after-tax) Government co-contribution Salary sacrifice Spouse contributions Combine multiple accounts^ Visit rest.com.au/growmysuper to learn more ^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. Planning for retirement 17

18 Receiving a boost from the Government Contribute a little extra from your pay packet and the Government may add to the contributions you made from your after-tax pay (co-contribution) If you earn less than $50,454^ per year (including assessable income, fringe benefits and super contributions) You must have made one or more after-tax contributions to your super fund to be eligible* Government tax-free co-contribution ^ Assessable income, plus reportable employer super contributions, plus reportable fringe benefits for the financial year. * You must meet other Government eligibility criteria to receive this benefit. Planning for retirement 18

19 Low Income Super Contribution (LISC) A boost for low income earners the Government will contribute 15% of concessional contributions made over the financial year up to $500 to your super fund Effectively seeks to return the tax paid on concessional contributions by your super fund Earn up to $37,000 pa Eligibility criteria apply The LISC will be abolished from 1 July 2017 Planning for retirement 19

20 Boost your super with salary sacrifice By arrangement with your employer to be taken out of your pre-tax salary Reduces your assessable income so you pay less income tax Salary sacrifice contributions are taxed at 15%, instead of being treated and taxed as normal income. Speak to your employer or complete a Salary Sacrifice Form Planning for retirement 20

21 Contribution limits There s no limit on how much super you can accumulate over your lifetime, but there are limits on how much you can contribute each financial year before paying more tax. Financial Year Concessional Contributions Cap * Non-concessional Contributions Cap # Under 50: $30, and over: $35,000 Tax on amounts over the cap Your marginal tax rate plus Medicare Levy plus excess concessional contributions charge + $180,000 or $540,000 over 3 years (under 65) 49% Source: Income Tax Assessment Act 1997 * Includes employer contributions (including salary sacrifice contributions), and personal contributions claimed as a tax deduction by a self-employed person. The lower cap is subject to indexing. # Includes personal contributions for which an income tax deduction is not claimed. + A 15% tax offset will be applied in the member s tax return before the excess concessional contribution charge is applied. Up to 85% of the amounts above the concessional contributions cap can be released from the super fund to pay the tax. This includes Temporary Budget Repair Levy of 2%. The Temporary Budget Repair Levy Tax is payable by anyone earning $180,000 or more for the 2015/2016 year. Planning for retirement 21

22 Consolidate we can help Visit rest.com.au/consolidate to learn more Consolidate via MemberAccess by providing your old fund name and membership number we ll do the rest for you Avoid paying extra fees by consolidating your super accounts Before consolidating check how it might affect insurance in your other funds and if they have any exit fees seek financial advice if you have any questions. Planning for retirement 22

23 When you re ready to retire Super phase Pension phase Flexible regular payments You may also be eligible for the Government Age Pension Tax effective Transition to retirement option A financial adviser can help you to put the right structure in place to meet your needs Planning for retirement 23

24 REST Pension features Award-winning* with competitive long-term performance Low fees Range of payment and investment options Transition to retirement option Concessional tax treatment REST does not pay or receive commissions * Ratings and awards are not the only factors you should consider when deciding how to invest your super. For more information on our awards visit rest.com.au/ourawards. Past performance is not an indicator of future performance. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to superratings.com.au for details of its ratings criteria. Planning for retirement 24

25 Member benefits REST will pay for your first super-related question over the phone with a Money Coach. Some subjects may be excluded Personal advice paid for on a fee-for-service basis Experienced planners available to help including a full financial plan Money Solutions Pty Limited ABN , AFSL No Money Solutions personnel are not representatives of the REST 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. Planning for retirement 25

26 Step 3 A case study Planning for retirement 26

27 Important Information The information contained in this presentation is general in nature. It does not take into account your personal goals, financial situation or needs. As such, the information contained in this presentation is no substitute for personal financial advice. Contact your Financial Adviser before acting on any of the information contained in this presentation. A Financial Adviser can assess the appropriateness of ideas or strategies presented, having regard to your personal goals, financial situation and needs. In relation to specific financial products, we recommend you obtain and review the Product Disclosure Statement (PDS). The PDS provides detailed information relating to that financial product. Money Solutions Pty Limited, ABN disclaims all liability in relation to any reliance by you or any other party on information in this presentation. Money Solutions holds an Australian Financial Services Licence No: Money Solutions Pty Ltd 2014 ABN AFSL

28 Introduction Rita Lamack Financial Planner Money Solutions Advising REST Members for 8+ Years. Experience I m a Financial Planner and joined Money Solutions in With 10 years financial planning experience I ve helped thousands of REST members approaching retirement.. Rita operates under the Money Solutions Australian Financial Services Licence (AFSL ). Money Solutions is a member of the Financial Planning Association of Australia. Money Solutions Pty Ltd 2014 ABN AFSL

29 Introduction Rob Patel Financial Planner Money Solutions Experience Rob is a Financial Planner and joined Money Solutions in With 7+ years financial planning experience Rob has helped thousands of REST members approaching retirement. Rob is an expert in financial strategies which can help you achieve your financial goals. Qualifications Rob is a fully qualified Financial Planner. He holds an Advanced Diploma in Financial Services (Financial Planning), Masters of Business and Commerce (Finance), Bachelor of Commerce (Accounting). You will benefit from Rob s blend of technical expertise, practical experience, friendly nature and a genuine communication style to feel more confident and positive about your finances. Rob is authorised to provide advice on the following areas: Superannuation, Transition to Retirement strategies, Retirement Income Streams, Centrelink/Age Pension, Investments and Life Insurance. Rob operates under the Money Solutions Australian Financial Services Licence (AFSL ). Money Solutions is a member of the Financial Planning Association of Australia. Money Solutions Pty Ltd 2014 ABN AFSL

30 Introduction David Sengchansavang Financial Planner Money Solutions Experience I m a Financial Planner and joined Money Solutions in With 7 years financial planning experience, David operates under the Money Solutions Australian Financial Services Licence (AFSL ). Money Solutions is a member of the Financial Planning Association of Australia. Qualifications Fully qualified Financial Planner and an Advanced Diploma in Financial Services (Financial Planning). Currently completing accreditation for a Certified Financial Planner. Authorised to give advice on: Superannuation Transition to Retirement strategies Retirement Income Streams Centrelink/Age Pension Investments Life Insurance Money Solutions Pty Ltd 2014 ABN AFSL

31 Introduction Jas Gill Financial Planner Money Solutions Experience Financial Planner based in our Melbourne office also covering Victoria and South Australia. With 5 years' experience in financial services and financial planning sector. Qualifications Qualified Financial Planner. Bachelor Degree in Business and near completion of Certified Financial Planner designation, has completed the Diploma of Financial Planning Superannuation Transition to Retirement strategies Retirement Income Streams Centrelink/Age Pension Investments and Wealth Creation Life Insurance Money Solutions Pty Ltd 2014 ABN AFSL

32 Money Solutions Money Solutions established in 1995 We have Financial Planners in major cities around Australia Our vision is to engage the members Preferred Financial Planning Partner to REST Money Solutions Pty Ltd 2014 ABN AFSL

33 What Makes us Different Banks - Banks manufacture products and then sell - Reward on product sales - Costly for clients Money Solutions - We do not manufacture products - We focus on advice - We are cost effective Money Solutions Pty Ltd 2014 ABN AFSL

34 We cover all life stages Advice Level High Income/ Reducing Debt - Tax effective savings - Building assets Getting Married/ Starting a Family/Work Break -Insurance - Estate Planning - Spouse Contributions Retirement - Cash flow management - Starting a pension - Centrelink Preparing for Retirement - TTR - Retirement Options - Lump sum contributions Buying a house - Managing savings - Consolidating Funds 18 yrs Starting first job - Which Fund? - Co-contribution - Which Investment option? Age 75 yrs + Money Solutions Pty Ltd 2014 ABN AFSL

35 We specialise in Pre-Retirement Planning Superannuation Post Retirement Planning Pensions Strategies for tax effective income Creating Wealth outside of superannuation Personal Insurance Money Solutions Pty Ltd 2014 ABN AFSL

36 Our Advice Process Money Solutions Pty Ltd 2014 ABN AFSL

37 Pre-Retirement Considerations Money Solutions Pty Ltd 2014 ABN AFSL

38 Pre-Retirement Consideration Consolidate Superannuation Increase contributions Pick Right Investment Option Investigate the option of a Transition to Retirement Pension Money Solutions Pty Ltd 2014 ABN AFSL

39 Superannuation Tax is the difference Superannuation is a low tax investment! 0 47%* Tax on Earnings 15% 0% Non Super Superannuation Super Pension *Includes temp budget repair levy Money Solutions Pty Ltd 2014 ABN AFSL

40 Case Study Meet Lynn Her situation: Aged 60 Salary of $42,000 pa, working full-time. No outstanding debt, owns her home. REST Industry Super balance of $110,000 invested in the Balanced Strategy as well as two other funds. Her goals To retire at age 67 $40,000 net income in retirement Money Solutions Pty Ltd 2014 ABN AFSL

41 What should Lynn do? 1. Consolidate Superannuation into one 2. Change investment option from Balanced to Core 3. Contribute a little extra into superannuation on a monthly basis 4. Start a Transition to Retirement pension Money Solutions Pty Ltd 2014 ABN AFSL

42 Comparing retirement position Balance after recommendations $219,000 Balance before advice $179,000 Money Solutions Pty Ltd 2014 ABN AFSL

43 Why does it work? Save Fees Save tax Higher investment return (higher risk) Adding extra on a regular basis Money Solutions Pty Ltd 2014 ABN AFSL

44 Transition to Retirement Salary Sacrifice boosts the saving in your super account Super Account Use your super saving to open a pension Move Salary From Work Pension income tops up your salary Pension Account Money Solutions Pty Ltd 2014 ABN AFSL

45 Transition to Retirement - Comparison No Plan Tax Take home pay Super Transition to Retirement Tax Take home pay Super Money Solutions Pty Ltd 2014 ABN AFSL

46 Retirement Considerations Money Solutions Pty Ltd 2014 ABN AFSL

47 Post- Retirement Consideration Start an Income Stream Pick Right Investment Option Maximise Centrelink Estate Plan Options Money Solutions Pty Ltd 2014 ABN AFSL

48 What to expect from the Government - Age Pension Age Requirements Your eligibility for Age Pension depends on when you were born. Qualifying age for those born before 1 July 1952 is age 65. From 1 July 2017, the qualifying age for Age Pension will increase from 65 years to 65 and a half years. The qualifying age will then rise by six months every one and a half years, reaching 67 by 1 July See table below. Date of birth Qualifying age at 1 July 1952 to 31 December years and 6 months 1 January 1954 to 30 June years 1 July 1955 to 31 December years and 6 months From 1 January years Source: Department of Human Services Money Solutions Pty Ltd 2014 ABN AFSL

49 What to expect from the Government Age Pension Maximum Rates (Including Supplements) Status Per fortnight Per Annum Single $ $22,721 Member of a Couple (each) $ $17,126 ($34,252 total) Couple separated due to ill health (each) $ $22,721 Money Solutions Pty Ltd 2014 ABN AFSL

50 What to expect from the Government Age Pension Assets Test thresholds Family situation For home owners For non home owners Single $ $ Couple (combined) $ $ Illness separated (couple combined) $ $ One partner eligible (combined assets) $ $ For part pension assets must be less than Family situation For home owners For non home owners Single $ $ Couple (combined) $ $ Illness separated (couple combined) $ $ One partner eligible (combined assets) $ $ Money Solutions Pty Ltd 2014 ABN AFSL

51 What to expect from the Government Age Pension Income Test thresholds Single Fortnightly income up to $162 ($4,212 pa) over $162 Reduction in payment full payment 50 cents for each dollar over $162 Couple combined, illness separated (couple combined) Fortnightly income up to $288 ($7,488 pa) over $288 Reduction in payment full payment 25 cents in the dollar each over $288 Money Solutions Pty Ltd 2014 ABN AFSL

52 Why speak to us? how much will you need for retirement? how to minimise tax? how to maximise Centrelink? which investment option is best? How will you cope with change in your circumstances? Money Solutions Pty Ltd 2014 ABN AFSL

53 Ongoing Care Program Because your circumstance will change Because we feel you are important Because we want to help you 1. At least 1 face to face review meeting with your dedicated financial planner 2. Regular market updates 3. Additional advice at minimum cost 4. Support with paperwork Money Solutions Pty Ltd 2014 ABN AFSL

54 What should you do? Each Situation is Different Talk to a Financial Planner Money Solutions Pty Ltd 2014 ABN AFSL

55 NEXT STEP- Call or Fill out the form request an appointment or contact us on FINANCIAL PLANNING ENQUIRIES Money Solutions Pty Ltd 2014 ABN AFSL

56 Our commitment to You Genuine care of members Member focused communications Planning approach which focuses on member needs Adding real value Money Solutions Pty Ltd 2014 ABN AFSL

57 Step 4 Next steps Planning for retirement 57

58 Knowledge hub Explore nine life events with information relevant to age and super knowledge Interactive time line shows information most relevant to your life stage Explore featured and trending articles or search articles by topic eg investment Easy to digest information such as videos and tip boxes Share articles via social media Planning for retirement 58

59 Tools and resources Interactive calculators Investor profile quiz Professional financial planning advice Seminar and webinar program Knowledge hub Planning for retirement 59

60 Access your account online MemberAccess online and on your mobile: View your account balance Update your personal details Consolidate your super Supply your TFN Review or change insurance information (for REST Super members) Check contribution history Switch investment options Choose to receive estatements Register or login at rest.com.au Planning for retirement 60

61 We re here to help General information about your super and pension Contact REST Industry Super am-8pm weekdays rest.com.au Financial advice Request a call or make an appointment with Money Solutions* * Money Solutions Pty Limited ABN , AFSL No Money Solutions personnel are not representatives of the REST 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. Planning for retirement 61

62 Thank you 62