Approaching retirement

Chapter 1: Getting retirement ready 

Hi, I'm Jeff Wallens, Senior Education Specialist at CBUS. 

I've spent over 25 years in super helping people make sense of what they've got and what they can do with it. This is 'Straight Talk'. 

We break down the parts of super that matter in plain language so you know what to do next. One of the biggest financial mistakes people make in their 50s is a simple one. 

They don't start planning for life after work. A lot of Australians put it off. 

Some feel like they don't have enough in super, some don't know where to begin, others feel like they need everything lined up before they take the first step. And that's understandable. 

But here's the reality. You don't need a perfect plan to get moving. You just need to start somewhere and build from there. 

In this video, we'll look at a few key questions to help you think about your next steps and show you where CBUS can step in to support you along the way. 

Chapter 2: Where are you at right now? 

Question 1. Where are you at right now? Start with where things stand today. How much do you have in super? What other investments do you have alongside it? 

Do you have any debt that's still hanging around? 

This gives you a clear starting point and helps you see the full picture, not just one piece of it. 

If the Age Pension will be a part of your income later on, it helps to understand how your assets and income could affect your eligibility, because what you do now can shape what you're entitled to down the track. 

A good place to start is dealing with debt. 

High interest debt like credit cards, car loans can eat into your future savings faster than you might expect, so reducing or clearing these can make a real difference over time. 

If possible, paying off your home loan before you retire can also be valuable. 

Your family home generally is not counted in the Age Pension assets test, and having equity can give you more flexibility later on if your circumstances change. 

In some situations, that equity can open up options. 

For example, you may be able to sell your home and contribute up to $300,000 per person into your super. 

This is called the Downsizer contribution provision, and it's available from age 55, depending on your circumstances. Next, take a closer look at your super. 

Is your employer paying the correct super guarantee contributions? Are you adding extra where it makes sense for your situation and your goals? 

If your balance was below $500,000 at the end of the last financial year, you may be able to contribute more by using unused caps from previous years. 

This is known as carry-forward concessional contributions. 

It allows you to catch up on contributions you didn't use in earlier years, which can help give you a super a meaningful boost. 

Chapter 3: What will your income look like? 

Question 2: What will your income look like? When you stop working, where will your income come from?  

For most people, it's a mix. 

You're super, the Age Pension and sometimes other savings or investments all working together. 

Our Retirement Income calculator on the CBUS website can help you estimate whether you're on track. You can also show how different decisions today could shape your income later. 

Understanding the Age Pension. For many of us, the Age Pension does a lot of the heavy lifting in retirement. 

You can generally apply 13 weeks before you turn 67, as long as you meet the residency requirements. 

How much you receive depends on your assets and your income, which are assessed under Centrelink's Assets and Income tests. 

If you have a younger spouse, their accumulation super account is usually not counted in the Age Pension while they're still under Age Pension age. 

We cover this in more detail in our video 'Super and the Age Pension' as part of this series. You can also explore the Age Pension section on the CBUS website. 

Chapter 4: What will you need to spend? 

Question 3. What will you need to spend? Now think about your day-to-day costs. What will your income actually need to cover? 

Everyone's situation is different, but a good place to start is to think about what you need to spend and what you want to spend. 

That could include everyday costs as well as things like travel, hobbies or helping family. 

It also helps to compare your expectations to general benchmarks like the Association of Super Funds of Australia's Retirement Standard which outlines what a modest or comfortable lifestyle costs. 

From there, you can build a clearer picture of what your retirement looks like and tools like the CBUS Budget Planner available on our website help you map this out. 

Does your investment strategy match your plan? 

Another common mistake is not matching your investment approach to your time frame and risk appetite. 

In your 50s, you could still be investing for another 15 or 20 years. 

And even in retirement, your super often needs to keep growing to stay ahead of the rising cost of living. 

Take a look at how your super is invested and whether it lines up with your needs and goals. Different investment options can lead to very different outcomes over time. 

Alternatively, if you're planning to withdraw your super soon, it's worth checking how it's invested. A lower level of risk could better match where you're at. 

If you're not sure where to start, take a look at the Investment Basics section on the CBUS website. 

It comes down to timing, when you'll need your money and how you plan to use it. 

Consolidating your super. If you've got more than one super account, it might be worth bringing them together. 

Consolidating your accounts can make things easier to manage and give you a clearer view of your overall balance. 

It may also reduce the amount you're paying in fees and insurance premiums across multiple accounts, which can add up over time. 

To combine your super, you can log into your CBUS online account, select 'Consolidate My Super' and follow the steps. 

Chapter 5: Don’t miss the tax benefits 

One area people often overlook is how super is taxed and missing this can cost you over time. Super isn't just a place to save, it's also a tax structure. 

In retirement, income from super and investment earnings can be tax-free. Depending on your circumstances. 

This can make a meaningful difference over time, particularly when combined with other sources of income. 

Chapter 6: What's next 

So what's next? Let's get moving. Head to the CBUS website and start building your plan. 

You'll find tools and calculators to check your income, plan your spending, and explore your options in one place. 

If you'd rather learn by listening, we also run seminars and webinars that go through these topics step by step. 

They're practical, easy to follow, and included as part of your membership. 

You can also tune into the CBUS Super Shift podcast for conversations about super and retirement from planning to the Age Pension. 

If you've got questions or just want to talk it through, call the CBUS Advice team. 

They'll take the time to understand where you're at, explain your options, and help you work out what to do next. 

Are you making extra super contributions? Super can be a tax-effective way to save for retirement.

Here are some ways you might be able to contribute:

• Salary sacrifice: Salary sacrifice contributions let you add more to your super from your before-tax pay. These contributions are only taxed at 15%. This might be lower than your marginal tax rate.
• Downsizer contributions: If you're over 55, you could contribute up to $300,000 ($600,000 as a couple) from the proceeds of the sale of your house to super.
• Spouse contributions: Help your spouse grow their balance and you may be eligible for a tax offset.

There are limits on how much you can add to your super with before- or after- tax contributions. Don’t go over these limits or you might pay extra tax. Learn about contribution caps. 

Learn more about making super contributions. 

Having multiple super accounts can mean you’re paying more fees than you need to. You can save time and money by consolidating your super in one place.

Find out how to consolidate your super. 

As you get closer to retirement, your financial goals might change. Take a look at how your super is invested to see if it's still right for you. We have range of investment options to choose from. 

• To check your invesment options, login to your account.
• Learn about your investment options.

Eligible members get automatic cover for Death and Total and Permanent Disability (TPD). As you get closer to retirement, the type of work you're doing or your financial situation, like your debt, might change. This means your insurance needs might change, too.

You can check and change your cover at any time. Make sure you're only paying for the cover you need.

• Check your insurance cover by logging into your online account
• Learn more about your insurance options.

Your super doesn’t automatically become part of your estate when you die. Even if there are instructions in your will. That’s why it’s important to nominate at least one beneficiary to receive your super.

Check the following:

Are your beneficiaries current?

• Update your beneficiaries if your family situation changes. This includes marriage, divorce or new children.
• You can check your beneficiaries by logging into your account.

Have you set up a binding nomination? 

• A binding nomination is legally binding. This means we must pay your death benefit to the person or people you’ve nominated.
• This helps to avoid lengthy delays and costly legal issues. 
• Learn how to set up a binding nomination.

Chapter 1: Income beyond your super 

Hi, I'm Jeff Wallens, Senior Education Specialist at CBUS. 

I've spent 25 years in super helping people make sense of what they've got and what they can do with it. This is 'Straight Talk'. 

We break down the parts of super that matter in plain language so you know what to do next. 

When you start thinking about slowing down with work, one question comes up pretty quickly. How much will I actually have to live on? 

Your super plays a part, but it doesn't have to carry everything, especially once you reach Age Pension age, which is 67. 

In this video, we'll walk through three income sources you can use as you wind down or stop work. You'll probably know the first two, but the third one might surprise you. 

Combine them and you can have more to work with than you think. First up, the Age Pension. 

Chapter 2: The Age Pension 

For some people it becomes their main income, for others it helps top things up. Depending on your situation, it could be as much as this each year. 

Here's the part most people don't realise. 

Some Australians miss out on thousands of dollars simply because they apply too late. Payments only start from when you apply, they're not backdated. 

That's why timing matters. 

Wait, and you don't just delay the payments, you miss out on them entirely. Even a few months can make a difference. Over a year it can add up to thousands. 

Knowing when to apply can have a real impact on what you end up with. 

In fact, research showed that one in three Australians wait more than a year to claim. Some miss out for even longer. 

More than one in two Australians aged over 67 qualify for either a full age pension or a part payment. 

By age 80, that rises to more than 75%. 

For many, it becomes a key part of their income later on, and you don't need to be retired to receive it. 

Chapter 3: Eligibility 

To qualify for the Age Pension, there's a few things to tick off. You need to be 67 or older. 

You need to be an Australian resident for at least 10 years, including five continuous years. 

Centrelink looks at what you earn and what you own to work out if you qualify and how much you may receive. 

Income can include wages, rental income and deemed income from your financial assets, including super. 

That's income Centrelink assumes your savings or investments pay you based on set rates, even if they're not earning that much. 

Some pensions, annuities and overseas income may also be included. 

Assets include things you own, such as cars, home contents, investment properties and savings. Your super counts once you reach Age Pension age. 

The home you live in usually is not included in the assets test. 

Different limits apply depending on whether you're single or part of a couple and whether you own your home. These details might seem small, but they can shift your outcome. 

What you receive depends on how everything is assessed together. It's worth looking at the full picture, not just one part of it. 

Your eligibility can change over time even if you don't qualify straight away, so it's important to look again later. 

You can check the details on the Services Australia website or use the CBUS Age Pension calculator to get an estimate. 

Chapter 4: Super 

Now let's talk about super. Some people retire with enough to cover most of their expenses. However, for most CBUS members, that's not the case. 

The good news is your super doesn't have to do all the heavy lifting. It works alongside other income. This is where things start to come together. 

When you look at each income source on its own, it can feel like it won't go far, but combine them and you start to see what's possible. 

For example, if you had $150,000 in super, this could provide you with this much income each year. 

In this situation, super plays a role, but it doesn't have to be the main player. 

Chapter 5: The Home Equity Access Scheme 

The third option is something fewer people know about. It's called the Centrelink Home Equity Access Scheme. 

If you own your home, it lets you turn part of its value into an income stream. 

For example, a couple with a home worth $800,000 could receive this much each year. So how does it work? 

It's a Government scheme that lets Australians of Age Pension age receive non-taxable fortnightly loan payments from Centrelink. 

And you can take that income as a fortnightly payment, a lump sum or a mix of both. It's a loan secured against your home and needs to be repaid later with interest. 

This interest compounds each fortnight on the loan balance until it's repaid in full. Over time the amount owing can grow. 

You can choose to pay the interest as you go or leave it to be repaid later when the home is sold or your estate settles upon your death. 

There's also a no negative equity guarantee, which means you or your estate won't have to repay more than the home's market value. 

To qualify, you need to be 67 or older and eligible for payments such as the Age Pension, Carer Payment or Disability Support Pension. 

Even if your Age Pension payment is $0 because your income and assets are over the thresholds, you might still qualify. If you rent, there's support available. 

It's called Rent Assistance. 

If you pay rent and receive certain Centrelink payments, you'll get this automatically. No separate claim is needed. 

Services Australia checks your eligibility when you apply for payments or update your living details. 

If you're eligible, you may be asked to complete a rent certificate or provide a tenancy agreement. When you combine these income sources, this is what it could look like. 

This is where things start to shift. It's not just about one income stream, it's about how they work together. Seeing it like that makes it a lot clearer. 

Chapter 6: What's next 

Yeah, there's a bit to take in here, but you don't have to figure it out on your own. 

We run seminars and webinars where our Education team breaks this down in a clear, practical way. They're easy to follow and included as part of your membership. 

You can also listen to our podcast CBUS Super Shift, where we talk about super and preparing for life after work. 

Or head to the CBUS website, where you'll find tools and guides to help you plan your next steps. And if you'd rather talk it through, give the CBUS Advice team a call. 

They'll chat about your options and help you see how it all fits together. 

Once you do, you'll have a clearer picture of what your retirement could look like.