4 ways to maximise your super with limited savings
Alarmingly, only one third of us have enough superannuation to retire with, but there are still ways you can save for a comfortable retirement
With our expenses constantly rising, there has never been a better time to ensure your super is in good shape. With only one third of us having enough superannuation to retire, we are always looking for the best ways to maximise our savings.
TODAY chatted to Money Magazine editor Effie Zahos for her tips, and below are four key points that may help you increase your retirement funds.
1. Downsizing your home
The new federal budget measures encourage people over 65 to sell their home and downsize. This would potentially allow individuals to put $300,000, or couples $600,000 away into their superfund. The only problem with this strategy is that you thanks to changes to the aged pension, individuals lose $3 a fortnight ($78 a year) of the age pension for every $1000 above the threshold.
2. Maximising your property
Reverse mortgages allow older Australians to partake in a financial agreement where a homeowner uses equity in their home as security for a loan, typically to supplement retirement income. It makes sense to use a reverse mortgage, when your other assets (like super) are exhausted. It may also be worth considering several options including — taking in a boarder through Airbnb (although this can affect age pension payments), or selling property to one of your children (if they are wealthy) and renting back from them.
3. Pension loans
The federal budget saw the extension of the Pension Loans Scheme to all pensioners. The scheme currently allows a part-pensioner or self-funded retiree to borrow money from the government against the value of their real estate assets. There are a few criteria you must meet to be eligible, which you can find on the Department of Human Services website.
4. Managing existing super
Combining the age pension with super can be hard for home-owning couples whose super balance is between $400,000 and $1 million. If you have limited savings or assets, you are likely to receive a higher age pension. However, experts such as Ross Clare from ASFA have suggested you should not stop saving at the amount that gives you the full age pension. Options for those in the lucky position to have too many assets and want to receive the age pension include, upgrading your property, travelling, giving it away, or buying a funeral bond.