We’ve collected a handful of examples of our members who retired with HOSTPLUS’ help to give you an idea of what your own retirement might look like.
Mervyn set his own retirement schedule
As Mervyn was nearing retirement, the Queensland travel agent found himself looking for a strategy that would ease him out of the workplace seamlessly.
What Mervyn wanted most of all was a super fund that could help him navigate the retirement process with as little stress as possible.
“HOSTPLUS helped me set up my pension.”
Last year Mervyn contacted HOSTPLUS. Although he hadn’t previously been a member, he’d been impressed that HOSTPLUS offered its members a low fee structure, objective financial advice from licensed, professional advisers and the fact that HOSTPLUS is the industry super fund for tourism, Mervyn’s own line of work.
To his relief, Mervyn found that the process of setting up his pension was surprisingly easy. He says that dealing with one main point of contact was a distinct advantage.
“HOSTPLUS helped me set up the plan, and put it into action with a minimum of fuss,” Mervyn said. “I was still working and could not afford the time to waste filling in endless forms. The whole process went smoothly and allowed me to actually enjoy the prospect of looking forward to retirement.”
Mervyn is enjoying the degree of control he has over his finances. “I can go online and change my investment options based on my investment goals and what’s happening in the market. I can also look at historic results showing trends in past years and invest accordingly.”
HOSTPLUS offers members the facility to choose from a broad range of investment options for their pension and making changes is free of charge.
“Control over my pension – plus the fact that I can still access the impartial advice from HOSTPLUS' financial advisers – means my finances are in the best possible place as I move into retirement.”
It turns out that actually retiring is the next challenge. Work has been so busy lately that Mervyn has found himself at the office up to five days a week – he said his wife is not too happy about that!
“I’m getting there,” he said. “It’s just a bit slower than I expected!”
How Megan kept on travelling
Megan was a little worried when she finished her career as a tour operator after 33 years.
Her final salary was $43,000 per year. Having paid off her mortgage, Megan wondered how long her super would be able to replace her salary.
Megan arranged to meet with a dedicated Industry Fund Financial Planning HOSTPLUS financial adviser.
She confirmed that her super balance was $428,000 and found out that she would need $23,000 per year to maintain her current lifestyle.
By rolling her super into a HOSTPLUS pension, Megan could draw an income that would replace her salary.
Having the HOSTPLUS pension meant Megan felt she had nothing to worry about when it came to her finances. She can look forward to regular, tax-free income – which is also earning interest – in retirement.
If Megan qualifies for the age pension, she could reduce the amount she draws down from her pension, meaning her retirement savings could last longer. Megan also knows that she can access her pension money in an emergency, or if she needs money for home repairs or upgrades.
Together with the age pension, this may also mean Megan could have enough money to do a bit of travelling by herself – instead of taking other people on trips!
How Alex got on track to a rewarding retirement with TTR
Although he was still working full time, Alex wanted to make sure he would retire with as much super as possible.
He had heard that salary sacrificing was a way to do this, but wasn’t sure exactly how it worked.
So in April 2010, Alex talked to HOSTPLUS about his options and learned about Transition to Retirement (TTR) strategies using a HOSTPLUS Pension.
Using the TTR strategy, which makes use of tax advantages for people over 55, Alex was able to salary sacrifice an extra $36,000 into his super and maintain his take-home pay.
Based on an annual income of $89,905 and account balance of $330,000, he could draw down $20,750 from his pension to maintain his current annual income and achieve an overall tax saving of over $8,000.
With this TTR strategy in place, Alex says he’s feeling much more comfortable about his impending retirement. He’s even taking leave more often – which his wife says is a very welcome change. Alex is also taking the opportunity to think about life outside work and the interests he wants to pursue. He sings regularly in a music group and is making more time for it on a regular basis.
A few months ago, Alex had a follow-up meeting with his financial adviser to review the progress of his HOSTPLUS super and pension accounts. He is very happy with all aspects of his financial strategy and is enjoying the feeling of being well prepared for his upcoming retirement.
Assumptions: Member is aged over 60 with a Marginal Tax Rate of 37% plus Medicare levy. No tax is deducted from earnings in a pension account. Payments from the HOSTPLUS pension will be tax free.
These case studies are based on actual HOSTPLUS member profiles.
Please seek individual financial advice before making any investment decisions.