The greatest promotion I ever received but never asked for
What could it really feel like to become the boss - in retirement?
At 62, I became the boss.
One day I reported to someone, the next day I reported to me, Brian Robert Ernest Woolley. To be honest, it was a little startling at first - like walking into a cobweb. But soon enough, I found how relieving my new position actually was - like walking into said cobweb and realising the spider had already vacated.
The biggest thing I asked myself: "was I ready?" I mean, I'd essentially been preparing my entire life, yet when the moment finally arrived, I still felt a little apprehensive and unsure. But as my father used to say, "when opportunity knocks, you better invite it in for a beer" - probably not the most responsible advice to give a boy in school, but I got the point.
I was given access to a new team of financial advisers I could rely on for the investment side of my business.
The questions began piling up faster than a queue for the latest smartphone. How much would the pay be? Would my hours change? What about added benefits? Would there be travel involved? What else was there to consider? Nonetheless, I was determined to make the most of it, and so I dove straight in.
The first port of call was to address the social side of things. During the first month behind the wheel, I established The Aquaholics – a social fishing group that met every third Tuesday.
I was given access to a new team of financial advisers that I could rely on for the investment side of my business.
Although my schedule was busy, I always had time to lend a hand on important projects outside my new role.
Even more rewarding was being able to help the younger members of my team find their feet.
I also started an R&D side project - experimental potpourri that smelt like home cooked meals.
My hours haven't changed too much, work has just been replaced with what I want to do.
Now, at 67, looking back on the day I became the boss - the day I retired - was truly the greatest promotion of my life. The questions I had to ask myself, the ones that anyone entering retirement needs to consider, started to be answered by one prudent action on my part.
It turned out I was ready to be the boss, and that activating my Retirement income account with Sunsuper played a big part in this. I was able to choose my own salary (tax-free for me, and generally for most people in retirement - so I'm told) that has supported me over the past few years, and will for many moons. This has allowed me to make the most of my time knowing I have a regular income. My hours haven't changed too much, work has just been replaced with what I want to do.
As for the added benefits, I was eligible for a part age pension from the government that has further helped with the "life of Brian" - as has the solid investment earnings on my savings by keeping my money invested in super. And, I've been able to travel a little bit here and there too.
You might be pleased to know The Aquaholics still meet every third Tuesday. Honestly, catching up is better than the actual catching of fish - it's clear that I'm unofficially the unluckiest angler on earth.
My not-so-new team of financial advisers at Sunsuper are still working hard for me, and are always available if ever I need assistance.
I'm still lending a hand on important projects outside my role - my son's landscaping being one of them.
The young members of my team, my grandkids, didn't just find their feet, they're now running me off mine.
And the experimental potpourri? Well, let's just say I bit off more than I could smell. Turns out the scent of tuna mornay at breakfast isn't everyone's cup of tea.
If, like Brian, you want to make the most of being the boss when you retire, Sunsuper can show you how.
*Brian’s story is a fictional Sunsuper case study developed to illustrate how many Aussies may feel as they enter retirement, and educate readers on the potential role of using their super in retirement to fund their dreams.
Congratulations on your new promotion
Head of Product Development
Learn more about our Retirement Income Account
- What is a Retirement Income Account?
- When can you get a Retirement Income Account?
- What are the benefits of a Retirement Income Account?
- Why not just take your money as a lump sum?
- Will you still get the government age pension?
- Why wouldn’t you do it all yourself through an SMSF?
- What is a Transition to Retirement Income Account?
What is a Retirement Income Account?
Also known as an allocated or account-based pension, a Retirement Income Account can provide you with a regular income in retirement. Once eligible, you start by moving your super from your super accumulation account (such as a Sunsuper Super-Savings Account) to a Retirement Income Account, which will then provide you with regular payments into your bank account. You also have the ability to take out lump sum withdrawals.
When can you get a Retirement Income Account?
You generally need to have a super balance of $60,000 to open a Retirement Income Account.
You also need to:
- reach your preservation age and retire,
- reach age 60 and leave work (i.e. terminate an employment arrangement), or
- turn 65 regardless of whether you’re retired or not
Seeking financial advice on your personal situation can help you work out if a Retirement Income Account is the best option for you.
What are the benefits of a Retirement Income Account?
Accessing your super through a Retirement Income Account could be a great way to help you live your dreams in retirement. With a Retirement Income Account (as long as you meet the age and other requirements) you:
- can receive regular payments from your Retirement Income Account into your bank account,
- can decide how much your payments are (above a minimum percentage that depends on your age) and when you receive them,
- can take out lump sum amounts from your account at any time,
- will continue to earn investment earnings on your balance,
- can choose how your balance is invested,
- won't pay tax on amounts you withdraw from age 60,
- generally won’t pay tax on investment earnings,
- can nominate your spouse or another beneficiary to receive your balance if you die.
Why not just take your money as a lump sum?
If you take your money out of super as a lump sum when you retire, rather than moving it into a Retirement Income Account, you could miss out on potential investment earnings on your balance. In fact, up to 60% of your retirement income could be generated after the day you stop working through investment earnings on your balance post-retirement.
You could also miss out on the convenience of receiving regular payments from your Retirement Income Account, just like you received a regular salary while you were working.
Will you still get the government age pension?
To receive the government age pension, you need to reach the age pension age (currently 66) and have income and assets below certain thresholds. Your super accounts (whether a Super-Savings Account or Retirement Income Account) will count towards both the age pension income and assets tests.
Seeking financial advice on your personal situation can help you work out if you’ll still be eligible for full or part of the government age pension once you activate your Retirement Income Account.
Why wouldn’t you do it all yourself through an SMSF?
A Retirement Income Account may be a simpler way to give you an income in retirement than managing your retirement savings and income yourself through a self-managed super fund. You may also be able to invest in some assets such as certain unlisted property and infrastructure assets through a Retirement Income Account that you won’t be able to access yourself through an SMSF.
You can still withdraw an income in retirement from an SMSF, and this may suit some people. But don’t forget that with an SMSF, even if you pay an accountant or adviser to help you, you will be personally responsible for meeting the standards prescribed by law.
What is a Transition to Retirement Income Account?
Talk to your financial adviser or get some advice through Sunsuper
Depending on your advice needs, we can answer most of your questions over the phone. To get the conversation started, just fill in your details and we’ll be in touch.
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