Retirement Planning

Most people underestimate the amount of money they will need to live on in retirement.

Life expectancies are increasing every year and most of us can expect to live for at least another 20 - 25 years after we retire, and the ageing of the population is placing enormous pressure on the government in regard to social security payments.

Recent changes to the superannuation legislation which take effect on 1 July 2007 include:

• Withdrawals from superannuation will be tax free for those over the age of 60.
• There will no longer be any reasonable benefit limits i.e.; there is no longer any restriction on the amount you can have invested in superannuation at concessionally taxed rates.
• Restrictions have been placed on the amount that can be contributed annually to superannuation.

Whilst these changes are generally positive, we can no longer afford to make a sprint to the retirement finish line. Contributions to superannuation need to start earlier.