Retirement made easy - REST Industry Super

Retirement
made easy
Helping you achieve
your retirement goals
rest.com.au/restpension 1300 305 778
Helping you achieve your retirement goals
As you near retirement you probably have a number of questions about
how to reach your financial goals. This brochure should help answer some
of those questions and give you some guidance when it comes to planning
for the next exciting stage in your life.
If you have any questions or want to talk through anything relating to your
super or retirement please call us on 1300 305 778.
REST Industry Super
REST Industry Super is one of Australia’s largest super funds trusted by
around 2 million members^ – nearly 1 in 6 working Australians is a REST
member*. Our mission is to improve the retirement outcomes of members
throughout their lives. We are run only to benefit members and our scale
allows us to negotiate better rates for our members for administration and
investment management. We also do not pay commissions to financial
advisers or dividends to shareholders.
Whilst we are an industry super fund, anyone can join REST no matter what
industry you work in.
We are proud to be recognised by winning a number of industry awards:
•
•
•
•
Pension of the Year 2014 and 2015 - SuperRatings
Pension of the Year 2016 Finalist - SuperRatings
Platinum Pension 2016 - SuperRatings
Money magazine’s 2014 and 2015 Best of the Best award
for Best Pension Fund Manager
• Chant West 2014 and 2015 Pension of the Year Finalist
^ As at 30 June 2015
*Number of working Australian sourced from Australian Bureau of Statistics, Labour force,
Australia, (cat. no. 6202.0), January 2016.
Awards and ratings are only one factor you should consider when making decisions on your
super. Further information regarding these awards can be found at rest.com.au/ourawards.
SuperRatings Pty Limited does not issue, sell, guarantee or underwrite REST products.
Go to superratings.com.au for details of its ratings criteria. For further information about
the methodology used by Chant West, see chantwest.com.au
Retirement made easy | 2
Retirement is one of
the most important
stages in your life
Retirement planning
Is there a legal age to retire?
How much will I need in retirement?
Although retirement may
not be in your immediate
future, REST is committed
to helping you make the
most out of your super.
So when the time comes,
you can enjoy the
retirement lifestyle
you would like.
Generally, there is no legal age at which you must
retire. Some industries and employment contracts
specify a retirement age but these do not affect
most Australians. However, there is an age at which
you can access your super.
How much money you’ll need in retirement is personal
and depends on the lifestyle choices you make. Super
can be an important source of income when you retire
(together with other investments and, if eligible, the
government Age Pension).
When can I access my super?
According to the Association of Superannuation Funds
of Australia (ASFA), a single person needs an annual
expenditure of $43,184 and a couple needs $59,236 to
live comfortably in retirement*.
When planning for
retirement, you will need
to consider when you
want to retire, how long
you will be in retirement
and how much money
you will need for a
comfortable retirement.
3
To encourage Australians to save for retirement,
the government restricts when you can access your
super. Generally you can access your super when you
reach your preservation age and have permanently
retired. Your preservation age is determined by your
date of birth.
Date of birth
To find out how much
super you may have
at retirement, you can
use our super and
retirement calculator
at rest.com.au/
calculators
Preservation age
Before 1 July 1960
55
1 July 1960 – 30 June 1961
56
1 July 1961 – 30 June 1962
57
1 July 1962 – 30 June 1963
58
1 July 1963 – 30 June 1964
59
From 1 July 1964
60
*ASFA Retirement Standard December quarter 2015 national. The figures in each case assume
that the retiree(s) own their own home, aged around 65, are relatively healthy and relate to
expenditure by the household. Single calculations are based on female figures.
Retirement made easy | 4
Budgets for various households and living standards
The ASFA table below shows the weekly and annual budget for a single or couple,
to fund a modest or comfortable lifestyle in retirement. Your pension may bridge the
gap between what you may qualify for through the Age Pension and the lifestyle
you’d like to achieve in retirement.
Expenditure
items
Modest
lifestyle
- single
Comfortable
lifestyle
- single
Modest
lifestyle
- couple
Comfortable
lifestyle
- couple
Housing ongoing only
$73.38
$85.05
$70.44
$98.59
Energy
$41.04
$41.65
$54.51
$56.48
Food
$77.42
$110.60
$160.38
$199.09
Communications
$8.74
$24.01
$15.29
$30.56
Household goods
and services
$27.20
$76.51
$36.88
$89.63
$17.78
$38.48
$28.86
$57.72
Transport
$92.62
$138.02
$95.24
$140.64
Health services
$42.41
$84.13
$81.84
$148.49
Leisure
$75.81
$229.73
$112.94
$314.82
Total per week
$456.39
$828.19
$656.38
$1,136.02
Total per year
$23,797
$43,184
$34,226
$59,236
Clothing and
footwear
Source: ASFA Retirement Standard, December quarter 2015 national. Updated quarterly to
reflect inflation. The figures in each case assume that the retiree(s) own their own home, aged
around 65, are relatively healthy and relate to expenditure by the household. This can be greater
than household income after income tax where there is a drawdown on capital over the period
of retirement. Single calculations are based on female figures.
5
Building your wealth
The compulsory payments your employer makes
into your super are a great start to saving for your
retirement. However, they may not be enough to fund
the lifestyle you would like when you retire.
Simple ways to boost your super before you retire
There are some simple, practical ways to get your super
working harder, as you’ll see in the table below.
Depending on your situation, a financial adviser can
help you determine which strategy or combination of
strategies work best for you.
For more information
about building your
wealth (including case
studies and eligibility
criteria) visit
rest.com.au/grow
Ways to boost
your super
Strategy
Find lost super
If you have changed jobs, address or your name, you
may have lost or unclaimed super. To check if you have
any lost or unclaimed super, use the SuperSeeker tool on
the ATO website (ato.gov.au/superseeker).
Combine your super accounts
If you’ve had more than one job chances are you have
more than one super account, paying more than one set
of fees, which could add up over time.
Combine them now and you could be sitting on more
money when you really need it. You’ll also enjoy the
benefits of less paperwork and it may be easier to keep
an eye on your money because it’s all in the one place.
Current REST members can save time and consolidate
online via MemberAccess.
Before consolidating your super, you should consider
the implications of doing so, including whether your
other superannuation funds charge an exit fee and any
loss of insurance cover or other benefits in your other
funds that may apply.
Save on fees
Ways to boost
your super
Strategy
Take advantage
of contributions
from the
Government
Super co-contribution
If you’re eligible and make a personal after-tax contribution
into your super by 30 June each year, the government will
match part of your contributions up to a certain amount after
you lodge your tax return for the financial year. To find out
more about eligibility visit rest.com.au/grow.
Low income superannuation contribution (LISC)
Unlike the co-contribution, you do not have to make a
personal contribution to be eligible for a LISC payment. If you
are a permanent resident and earn under $37,000 or less per
annum, the Government will refund you some of the tax you
paid on your employer contributions (15% contribution tax)
into your super up to a maximum of $500 each financial year.
The LISC will be abolished from 1 July 2017.
Transition to retirement
If you’ve reached your preservation age and still working,
you could boost your super and save on tax without affecting
your take home pay by using a transition to retirement
strategy (see page 12).
After-tax contributions
Making additional contributions from your post-tax salary
can be an effective way to grow your super. After-tax
contributions, also called non-concessional contributions, are
capped at $180,000 per year for the 2016-17 financial year.
If you are under age 65, you can contribute up to $540,000
($180,000 x 3) in after-tax contributions in a financial year
by bringing forward two year’s worth of contributions.
If you go over the after-tax contribution cap, you can choose
to withdraw the excess non-concessional contributions, and
any earnings. These earnings will be included in your income
tax assessment. If you choose not to withdraw your excess
contributions, they will be taxed at the top marginal rate.
Reduce your
income
tax without
affecting your
take home pay
Make voluntary
contributions
Lower tax rates
on investment
earnings
Salary sacrifice
Rather than contributing to your super after-tax, you may
be able to set up an arrangement with your employer
where you can elect to sacrifice some of your pay directly
into super pre-income tax.
In super, your salary sacrifice contribution will be taxed
at 15%, which may give you tax savings compared to your
marginal tax rate.
Investment earnings within super are only subject to tax
of up to 15% compared to non-super investments which
are generally taxed at your marginal tax rate. Investment
earnings on account-based income streams such as REST
Pension are not subject to tax.
Note: Fees are only one factor you should consider when making decisions on your super.
The information in this brochure is based on laws current as at 1 March 2016 and may change.
Retirement made easy | 8
Ready to retire
Generally you can access your super
when you have permanently retired
from work and have reached your
preservation age.
Once you have access to your super,
you can convert it to an account-based
pension, take it as a lump sum payout or
a combination of the two.
While there are benefits to both
payment types, an account-based
pension could be a better option
for many people because it offers tax
advantages, and assists in providing
a regular income in retirement.
Depending on all your income and
assets, you may also be eligible for a
government pension to supplement
your account-based pension.
What is an account-based
pension?
An account-based pension provides
you with a regular income in retirement.
It can help you:
• manage your income and spending
• with flexible payment options
• benefit from no tax applied on the
earnings of your pension investments
and no tax on the pension payments
once you’re aged 60 or over
• have access to a lump sum payment
from your pension account
• supplement any Department of
Human Services benefits you may
be entitled to.
REST offers a low fee account-based
pension (see below).
Introducing REST Pension
REST offers an award winning
account-based pension that can be
a tax-effective way of providing you
with a regular income in retirement,
or if you’re aged 55 or over and
still working.
In 2015, REST Pension was awarded
Pension of the Year 2015 from
SuperRatings and Money magazine’s
2015 Best of the Best award for
Best Pension Fund Manager.
The government Age Pension is a safety net for older Australians who do
not have enough super or investments to fund their retirement. At most it is
$394.20 per week for a single and $594.30 per week for a couple combined*.
For more information about the government Age Pension visit
humanservices.gov.au/agepension
* You may be paid an additional Pension Supplement and/or Energy Supplement amount on
top of this. Figures are correct as at 18 February 2016.
9
REST Pension features, at a glance
• It’s easy to join REST Pension
you need a minimum of $10,000 to
invest. To find out if you’re eligible to
invest, please read the REST Pension
Product Disclosure Statement (PDS)
for more information.
• REST offers a competitive and
simple fee structure – as one of
Australia’s largest profit-to-members
industry super funds, we offer
competitive fees and we also pay
no commissions to financial advisers,
planners or accountants.
• How your money is invested is your
choice – you can choose to mix and
match our 13 investment options,
or opt for the default Balanced
investment option. For more
information on investing with
REST and our investment options,
read our Pension PDS.
• Flexible income payments –
you can choose to receive pension
payments twice a month, once a
month, quarterly, twice a year or
yearly. You can change your payment
amount at any time (subject to
government limits).
• Regular reporting to help manage
your investment – you’ll receive two
statements each year, showing your
account balance, asset allocation,
fees and charges that have been
deducted from your account and a
payment summary.
• Friendly, personalised service and
easy access to up-to-date information
on your investments – online, over the
phone or face-to-face.
The Department of Human Services
(DHS) and the Age Pension
One of the roles of Centrelink which
is part of the DHS is to provide
payments and support for retirees.
From 1 January 2015 account-based
income streams such as REST
Pension are included in the deeming
rules also known as the income test.
If your income stream commenced
before 1 January 2015 and you satisfy
other conditions, your income stream
may be exempt from deeming.
To be eligible for the Age Pension,
you must satisfy certain requirements
such as be an Australian resident,
be a certain age and also satisfy the
income test (deeming) and the asset
test (your REST Pension is included
in the asset test)^.
^We recommend you seek independent
advice from a licensed financial adviser or
the Department of Human Services as to
how an account-based pension may affect
your entitlement to social security benefits.
For more information about REST
Pension, contact us:
rest.com.au/restpension
1 300 305 778, Monday to Friday
8am–6pm
Retirement made easy | 10
Transition to retirement
If you’re not quite ready to fully retire, but might be
looking to reduce your work hours or boost your
super in the lead up to retirement, then a Transition
to Retirement Pension may be an option for you.
What is a transition to retirement pension?
A transition to retirement pension allows you to
convert your super into an income stream if you
have reached your preservation age (refer to the
table on page 3 to determine your preservation age).
It is designed to supplement your income in the later
years of your working life before you retire.
A transition to retirement pension may suit you if:
• You want to boost your super in the lead up to
retirement via a salary sacrifice arrangement with
your employer.
• You’d like to work part-time but maintain the same
take-home pay.
What are the benefits?
• Reduce the amount of income tax you pay.
• Salary Sacrifice contributions! to your super account
(made under the concessional contribution limit) are
taxed at 15% rather than your marginal tax rate.
• If you’re aged 60 or over, your pension payments
are tax-free.
• If you’re aged 55 to 59, your pension payments are
subject to income tax. However, a 15% tax offset may
be available.
• Investment earnings on your pension are tax-free.
• Allows you to supplement income from other
sources whilst continuing to work.
For more information about transitioning
to retirement (including case studies) visit
rest.com.au/ttr
!
n additional 15% tax may apply to concessional
A
contributions for high income earners.
Retirement made easy | 12
Compare REST
Pension
Whether you are already
retired or approaching
retirement REST offers
a range of benefits
• low fees
• competitive
long-term returns
• no commission to
financial advisers
or dividends to
shareholders
• award winning
pension fund.
Financial advice
With the AppleCheck comparison tool,
produced by research house Chant West, you
can compare REST’s low fees and investment
performance with over 150 super funds.
Financial advice can help you take
control of your wealth, especially at
important turning points in your life
such as retirement.
This free report gives you:
Consider your financial goals
When setting goals, it’s important to ask
yourself the following questions.
• What lifestyle do you want to lead?
• What are your priorities in life?
• What do you want to achieve
financially?
• Who depends on you financially
and what do you want to provide
for them?
• an overview of the fund(s)
• a case study that shows total costs
• investment options available and how they
are performing
• a summary of services available to members
• Chant West’s rating of the fund(s).
Check it out here rest.com.au/compareREST
Note: Ratings are only one factor to take into account when deciding where to invest your super.
Past performance is not indicative of future performance.
13
Get appropriate financial advice
Different people seek advice for different
reasons. A financial adviser can help you
take a structured approach to achieving
your financial goals. They will consider
your objectives, financial situation and
needs, then recommend strategies and
products to suit you.
Financial coaching from Money Solutions
If you don’t already have a financial
adviser, REST can put you in touch with
Money Solutions*. Money Solutions is a
team of licenced financial advisers who
can assist you to develop a plan and
implement strategies for your super,
such as savings on tax and making an
investment choice. This could help boost
your super in the lead up to retirement.
*Money Solutions Pty Limited ABN 36 105 811 836, AFSL No. 258145. Money Solutions personnel
are not representatives of the Trustee. Any financial product advice given by Money Solutions
is provided under the Money Solutions AFSL. The Trustee does not accept liability for any
loss or damage incurred by any person as a result of using products or services provided by
Money Solutions.
Retirement made easy | 14
To find out more about REST Pension or a transition
to retirement strategy, contact us.
rest.com.au/restpension 1300 305 778
Please call between 8am-6pm Monday to Friday
REST Industry Super
Locked Bag 5042, Parramatta NSW 2124
This material contains general advice which has been prepared without taking into account your
objectives, financial situation or needs. Before making a decision based on this advice or deciding
whether to acquire or hold a product, you should consider its appropriateness having regard to
your objectives, financial situation and needs. You should read the Product Disclosure Statement
which is available from rest.com.au or by calling 1300 305 778 before making any decision
about the product. When you become a member of REST Pension, you join the Retail Employees
Superannuation Trust ABN 62 653 671 394, issued by the Trustee Retail Employees Superannuation
Pty Ltd ABN 39 001 987 739, AFSL 240003. Registered office: Level 7, 50 Carrington Street, Sydney
NSW 2000. 871.0 03/16 ISS4