By Trish Power

Part of DIY Super For Dummies Cheat Sheet (Australian Edition)

Your retirement can be a lot more relaxing if you do some planning for your super before you stop work; you need to ensure that you have enough money to last for the rest of your non-working life, and to decide what’s going to happen to the money when you die. Here are six ways to help you picture what your retirement is going to look like, financially:

  • Make sure your money lasts. The general rule when planning for retirement is: If you want a similar lifestyle to the one that you’re enjoying during your working life, you need a minimum of 60 to 65percent of your pre-retirement income in retirement.

  • Check you can access your super. Most Australians aren’t permitted to withdraw a super benefit before the age of55 when retiring, except in exceptional circumstances. For any Australian born after June 1964, you can’t access your super benefits until you turn 60. The restriction on accessing super benefits is known as preservation.

  • Choose an appropriate income stream. You can cash your super account and use your SMSF money to purchase commercially available pensions. If you intend to start a pension within your SMSF then you have two pension options.

  • Understand what tax you pay. If you’re aged 60 and retired, you can receive your SMSF benefits tax-free — as a lump sum or as an income stream (regular payments over a period of time). If you retire before the age of 60, you’re likely to pay tax.

  • Assess your eligibility for the Age Pension. Around 80 per cent of all retirees over the Age Pension age receive a full or part Age Pension.

  • Consider any estate planning issues. You may be able to choose to pay your spouse or dependent children (under a certain age) an income stream when you die, or you can leave the balance of your super account to your family as a lump sum.