Tips for retired members during market volatility
June 29, 2022
It could be a good time to review your financial strategies especially if recent market volatility has impacted your retirement savings.
The start of a new financial year could be a good time to review your financial strategies especially if recent market volatility has impacted your retirement savings. You can review your strategies and consider making changes to your retirement income stream if needed.
If you have a retirement income stream, review the annual income payments you draw down from it each year. There is a minimum income payment amount that you must take each financial year which is set by the government.
The Government has continued the temporary reduction to the minimum income payment requirements for retirement income streams by 50 % for the 2022-2023 financial year. The minimum annual payment is calculated on 1 July each year, based on your retirement income stream account balance. The 50% reduction will apply to the calculated minimum annual payment.
RetireAccess members receive a letter each year in July which outlines your yearly payments and allows you to make changes if you wish. If you have questions about your income stream, contact us on 1300 033 166.
A few things to think about during this time:
1. Review your retirement income needs. You may be able to put some discretionary expenses on hold such as entertainment and dining expenses until things settle down. With the cost of living increasing, now’s also a good time to review subscriptions you may not be using and things like heating and electricity providers to see if you can get a better deal.
2. Reconsider the need to make any lump sum withdrawals. If you can avoid taking additional funds out of your retirement income stream at this time it is worth considering. We know there may be times you’ll need additional funds but now’s a good time to reconsider anything extra you may have been thinking taking out of your retirement savings.
3. Review the investments options you are drawing your income payments from. How your savings are invested can have an impact during periods of volatility. The Lifestyle investment options were launched in November 2021 and are purpose built for people in retirement. They aim to help manage volatility and have performed in the top quartile for the period to 31 May 2022*. They also have a Cash Allocation feature which automatically transfers money into the Cash investment option each month. TelstraSuper Financial Planning can help you with your investment strategy. Request a call today.
Learn more about Lifestyle Investment options
4. Consider using cash in bank accounts or term deposits to fund your retirement income requirements. If you can avoid taking funds from your super and have cash reserves outside of super now is a time to consider drawing down on your assets outside of super that may not be affected by the market volatility.
5. If you are over age 60 and are drawing an income from your super account you may want to consider moving to a retirement income stream. There are some tax advantages to drawing an income from a retirement income stream. No tax is payable on investment earnings and no tax is payable on income payments from age 60. And if you open a RetireAccess retirement income stream you may be eligible for a Retirement Bonus of up to $8,000.
Let us help you navigate these uncertain times
If you want to discuss your retirement income needs or retirement strategies in light of the recent volatility, TelstraSuper Financial Planning has a team of financial advisers that can work through your retirement strategies. To book an appointment call 1300 033 166.
Join a webinar
Our Chief Investment Officer, Graeme Miller is also presenting a webinar called 'Your volatility questions answered' in July 2022. You’ll hear from Graeme about how markets have recently performed and what the coming year may bring.
*Past performance is not a reliable indicator of future performance. SuperRatings performance comparison for 1 year to 31 May 2022.