Retirement blessings with itself relaxation, lessening stress and tension, and of course, lots of free time on your hands. It is natural to expect that the standard of life you would enjoy after retirement should be of the same level as that you are enjoying now. The problem is that this requires a lot of long term financial planning.
It is expected that your source of income will dry up with your last day in employment but expenses would remain the same. They might even increase, mainly in the form of medical expenses. This means you need to invest properly in order to ensure steady and regular cash flow. The easiest way of doing this is by properly managing your superannuation fund.
Types of funds
Your employer must have paid 9% of your ordinary time earnings into your superannuation. So, you can expect to get a nice little packet at the end of your working life. There are different types of funds that have different rules about who can join. The four types of funds are
Corporate funds – These are generally only open to people working for a particular company. Sometimes, ex-employees or relatives may also be allowed to join.
Public sector funds – These funds are open only for Commonwealth and State Government employees.
Industry funds – normally open to everyone. Check with your employer and make sure if you are eligible as sometimes the company you are working for has to register itself first,
Retail funds – These are funds open for everyone and are generally run by financial institutions. Another unique type of superannuation fund is the self managed super fund, which is open for you and up to three other people.
What exactly is a Self Managed Super Fund (SMSF)?
Typically, a superannuation fund is a self managed super fund if (with a few exceptions):
o It has a trust deed that meets the requirements of the Superannuation Industry (Supervision) Act 1993 (SIS Act)
o It has four or less members
o Each member of the fund is a trustee
o No member of the fund is an employee of another member of the fund, unless they are related
o No trustee of the fund receives any remuneration for their services as trustee
If you are looking for investment avenues after retirement, real estate is also an attractive option. Although any type of real estate or property would be good investment, apartments are probably the best bet. The simple logic behind this is the fact that an apartment, apart from being a good and regular source of income for you, can also be turned into your own abode, if you feel like it.