Pinnacle Services

Retirement Planning

As you begin to think about your retirement, completely or partially, the most important thing you need to consider is how you plan to fund your retirement lifestyle. Planning for your retirement now is more important than ever given that we are retiring earlier and living longer.

You need to ensure you have a strategy in place to fund your own financial independence as you may not qualify for the Age Pension. At Pinnacle Financial Planning, we can offer advice on a range of different solutions to help you achieve your goals in retirement. We can help you determine how much you will require to meet your goals and how you can get there. We provide expert guidance on a range of financial services that includes retirement projections and modelling, investment recommendations, Centrelink advice and estate planning. We can establish a plan for you that considers the most tax-effective method of ownership and investment moving into your retirement.

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As you near closer to your retirement, you should ask yourself:

Will I have sufficient funds in Superannuation to last my lifetime?
Will I be able to comfortably fund my desired retirement lifestyle?
When do I want to retire and will I have enough money to fund my retirement years?
Will my investment options within my Superannuation affect my finances?
What type of Retirement Income Stream is appropriate for me? Is it an Account Based Pension, Transition to Retirement or some other type?
Will I be entitled to any Centrelink benefits?

These are just some of the issues you should consider discussing with a Financial Planner.

Re-investing distributions from your investment may assist you to achieve your goals sooner. Re-investing distributions or dividends earned from your managed fund or direct share portfolio allows you to compound the investment return (earn interest on interest).

Superannuation and Corporate Superannuation

Long-term View

Generally, Super is a long-term investment and as Super cannot be accessed until you retire, it is important to ensure the investment strategy within your Super meets your objectives.

Consolidate Super

Consolidating your super funds into one account will make it easier to keep track of your money and may reduce paperwork and fees associated with maintaining the funds.

Build your Super Savings

Contributing to Super can be a more tax effective strategy for many people than if they were to create a savings plan outside of the Superannuation environment. Before tax contributions (concessional contributions) and investment performance returns earned inside of Super are taxed at 15%.

Caps on Super Contributions

The concessional contributions cap for 2024-25 is $30,000 per individual per financial year.

From 1 July 2024, the non-concessional contributions cap is being increased to $120,000 as a result of indexation in line with average weekly ordinary time earnings (AWOTE). If you contribute more, you may have to pay extra tax.

Spouse Contributions

Contributing to Superannuation on behalf of your spouse can be a highly tax effective way to build savings for retirement whilst taking advantage of the tax benefits associated with income splitting in the future.

Superannuation Non-Binding Death Nominations

Superannuation does not automatically form part of your estate and the decision may be left to the trustee of the super fund, which may not be what you intended. Although you may be able to nominate a beneficiary, your death benefit will be paid at the discretion of the superannuation fund’s trustee.

Superannuation Binding Death Nomination

Some Superannuation Funds allow you to make a binding nomination which removes the right of the trustees to distribute your Super benefits at their discretion. A binding nomination will give you certainty as to who will receive your superannuation benefit in the unfortunate event of your death.

The Trustee of your Super Fund is bound to pay your benefit to your nominated beneficiary as long as:

The nomination is valid;
The nomination is received by the Trustee before your death;
The nomination has not expired (a binding nomination only lasts three years); and
The nominated person is a dependent or your legal personal representative at the time of your death.

Self Managed Super Funds

The term ‘Self Managed Superannuation Fund’ (SMSF) refers to a ‘do it yourself’ (DIY) super, which allows investors to have control of how their superannuation money is invested. A SMSF is a trust where funds or assets are held and managed on behalf of a maximum of four individuals, to provide future retirement benefits. Subject to certain exceptions, all members of a SMSF must be trustees of the Fund or directors of the fund’s corporate trustee. To ensure that a SMSF is complying, it must ensure the following are adhered to:

it has four members or fewer;
all members must be trustees (directors in this case a corporate trustee) and there must be no other trustees, unless it is a single member fund;
no members are allowed to be an employee of another member (or associate) unless the members concerned are relatives; and
no trustee of the fund can receive any remuneration for any services performed in relation to the fund.

We also have a dedicated self managed super fund department who can assist you to establish and maintain your super fund.

Succession Planning

Business succession planning should be made a priority for every family business. It is never too early to start planning for the future sale or transition of your business. You will need a solid plan that is right for you and your business, and the sale or transition of your business plays a major role. Planning not only includes when and to whom you plan to sell or transition your business to, but also ways to maintain your company’s value and tax planning, whilst being prepared for unforeseen events. Business succession planning aims to manage these matters, ensuring a smooth transition between you and the future owners of your business.

Estate Planning

Estate Planning is an important part of the financial planning process. It is difficult enough coping with the loss of a loved one without having to burden your family with additional financial pressures. Estate planning will provide peace of mind that your affairs will be in order in the unfortunate event if you become incapacitated or die unexpectedly. A Will is a legal document which distributes your assets to the people you choose, referred to as the beneficiaries. Appointing an executor to your Estate is an important decision that must be made, as they are entrusted with the responsibility of ensuring that your wishes, as contained in the Will, are carried out. A Power of Attorney is a very powerful document in which you appoint someone to make financial, legal and/or medical decisions on your behalf and is something that should only be entrusted to a close relative or trusted family friend. Estate planning is an extremely complex area and it is important to seek expert advice from a legal adviser in the preparation of your Will and appointment of a Power of Attorney. Contact Pinnacle Financial Planning to ensure you are on track to reaching your retirement goals.