PREPARING for retirement can be difficult for parents who have dependent children to support.
However, you don’t have to sacrifice building a retirement fund while supporting your children.
Forced saving can be your good ally in building your retirement fund. Voluntary contributions to your superannuation through salary sacrifice may help boost your nest egg. It may also help you reduce the amount of income tax you pay. Including your employer’s super guarantee contribution, you can make concessional super contributions of up to $25,000 each financial year. The government will tax your salary-sacrificed contributions at 15 percent, which could be much lower than your marginal tax rate.
Outside of super, there are options that may help you save for retirement, such as buying an investment bond or investing in a managed fund. You should seek advice before you decide if these options might work for you.
While building your fund for old age and supporting your dependants, it is important to make sure you are protected against the risk of losing your current income.
It is also critical to ensure your dependents are looked after if you die or become seriously ill or disabled. A life insurance policy may pay a specified amount to your beneficiaries when you die, offering a financial buffer even though you are no longer around to provide for them.
Your adviser can help you assess your current situation and develop a strategy to support your dependents while building a nest egg for a comfortable retirement.
For further information, contact the team at RI Advice Shepparton, 137 Maude Street, Shepparton or phone them on 5831 2833.