How to boost your retirement savings

24 May 2016

Retirement brings so much excitement for seniors who have left the workforce and now have time to travel, explore new hobbies and spend time with friends and family.

However, it also requires readjusting your finances and managing a new budget, now that you no longer have a regular income stream from your job. 

But don’t worry, there are ways of making your new financial situation work for you, whether it’s reducing your ongoing tax, maximising your benefits and entitlements or simply re-evaluating your household expenses.

1. Re-structure your finances to reduce ongoing tax

Use your super to minimise tax and have more dollars to enjoy later. In fact, it could be used as a means to fund your retirement.

"If you’re retired, all withdrawals and income stream (pension) payments from superannuation are tax-free after age 60," says Matt Torney, Retirement Specialist at Muirfield Financial Services.

If you’re still working part-time or if you’re under 65 and not working, subject to contribution limits, you can put money into super. So, if you downsize and have residual proceeds, you could contemplate putting that into superannuation.

2. Make the most of Centrelink benefits and entitlements

According to Matt, many retirees don’t realise what they’re entitled to from Centrelink, apart from the pension. 

“One of the ways to improve your entitlements is to structure your assets to make the most of your benefits,” adds Matt. 

"As a couple if one of you is under Age Pension age, any assets of the younger person held inside superannuation are not assessed by Centrelink.” 

Don’t forget to take advantage of all the discounts by using your concession card, either. For those that don’t qualify for an Age Pension, there are a few different cards that you may be eligible for, too. These include the Pensioner Concession Card, the Low Income Health Care card, the Commonwealth Seniors Health Card from Centrelink or the Victorian Seniors Card. 

3. Analyse your budget

Re-visit your current budget and consider where you can make cuts or look for more affordable options, such as looking for a new energy supplier or health insurance provider.

You may want to compare your current budget to the ASFA Retirement Standard, which gives you an idea of what the average retired couple might spend, depending on their lifestyle.

4. Invest responsibly

“Now is not the time to try getting rich because you’ve just had your last ever pay check and it needs to last as long as you do” warns Matt. "If you’ve got a portfolio of investments, consider structuring your investments to suit your retirement goals. A lot of retirees will have a need for ongoing income. So it is always good idea to structure your investments to produce some income in retirement."

5. Find a new income stream

In addition to joining a social club like Probus, returning to work often helps seniors regain a sense of belonging, as well as boost their retirement funds. 

Read our article on how to look for a new part-time job.