'Retirement' and 'income' are two words that you wouldn't usually group together.
“I won't have an income when I retire”, you say. But with a smart retirement plan, and clever Financial Planner at hand, you can maximise the money you see in your bank account while you minimise your workload. It's all about approach.
Get an expert on board
A MyState Financial Planner can recommend a retirement income stream (or income streams) that are the right fit for you and your lifestyle. We'll help you make the most of beneficial tax and social security treatment while we're at it, too.
Choose the income stream that's right for you
Retirement income streams generally fall into one of two categories: account-based and non-account-based.
You may be familiar with account based pensions – drawing a pension from your retirement savings, but there are other options. Non-account-based options include annuities and defined benefit pensions.
When considering the options for your future, it's important to remember that each type of stream brings its unique advantages and disadvantages.
Let's take a look at some of their differences:
- Account based pensions are flexible (provided you have met a Condition of Release, you can generally make lump sum withdrawals). However, their investment performance is generally at the mercy of investment markets – which can rise and fall.
- Annuities give something of a middle-ground. Some now feature the option to make lump sum withdrawals. Additionally, investment performance is guaranteed in advance by the annuity provider. This removes market risk.
- Defined benefit pensions are sometimes available to members of certain superannuation funds. When you take a defined benefit pension, you give-up access to your capital in return for a guaranteed income for life.
As you can see, there's an incredible amount of options in your hands. It pays to consider each one, and how it might suit your lifestyle.
A Financial Planner can help you take all of this information (and more) into consideration for your retirement journey, creating a portfolio to keep you thriving throughout your golden years.