James Coyle

Loans in retirement: Is repayment really the best choice?

One of the best things about writing articles and explainers for Retirement Essentials is the quality of the comments we receive in return. A recent article on the ‘classic dilemma’ of paying off debt or retaining a mortgage (but earning more in other ways) is an example. We received some great feedback from members on this topic. They pointed out that this option does not have to be an ‘all-in’ decision. Which has encouraged us to share their thoughts as well as a brief overview of the main decision-making points.

Our view is that there is rarely one right or one wrong approach to most things financial. The main reason is that at the heart of most financial decisions are emotional needs or concerns and lifestage needs which may often involve wrangling two different sets of priorities, should you happen to live as a couple.

There really is no one size fits all approach to debt management, hence our suggestions that you explore your options and if you are unsure, you seek further explanations, income projections or support from one of our experienced advisers.

Here are some of the great comments we received on this topic, followed by an overview of ways to view your options.

Want to contribute more to super? Then why aren’t you allowed?

by James Coyle | Customer Stories, Superannuation

Q. Help, I’m 76 and want to contribute more to my super, but I’ve been told I can’t!

This was the cry for help we received from Albert last week. He had just won $45,000 in a lottery and doesn’t want to spend it. Instead, he would like to put it into his super. A friend told him that once you turn 75 you can no longer make any contributions. Is this right?

Says James:

I think super is a terrific way to save for retirement. You start a job and your employer is legally obliged to contribute into your superannuation account – currently 11.5% of your ordinary time earnings and increasing to 12% on 1 July 2025. It’s a tax-effective environment, it compounds over your lifetime and there are even bigger tax advantages if you turn these savings into an income stream in retirement.

However many people who have already retired won’t have had the advantage of super all their lives. They are often playing catch-up. And getting money into super isn’t quite as simple once you have retired. But it’s not impossible if you understand the rules.

Because of the tax advantages of super there are limits to how much you can put in both when you are working and also after you have retired. And the rules change as you pass different age milestones, so here’s a brief summary of the main rules:

Not yet Age Pension age? The rules still apply

by James Coyle | Centrelink Age Pension, Customer Stories

This week the spotlight is on Sharon Sheehan and the way that her financial advice can make a big difference to the income of our members.

One common mistake Sharon has noticed is how many members are confused by the term ‘superannuation account’. Recent research from AMP suggested that 70 % of older Australians don’t know what an Account-Based Pension is. Given that this is the most common mechanism for Australians to withdraw funds from their super account, this could be considered surprising. But Sharon didn’t think that was necessarily the case. She believes that much of the confusion comes when super funds give different names to their Account-Based Pensions, for instance FirstChoice ( Colonial First State) or Retirement Income Account (ART) or Choice Income (AustralianSuper). It’s not exactly easy to discern that this is your own super, in draw-down mode. And if it’s not that easy to distinguish this as an income stream, this might lead to misreporting when you decide to apply for any government entitlements.

Another aspect of retirement income that Sharon thinks is not well understood, is how Centrelink views the super savings of both members of a couple. Just because you haven’t reached 67 doesn’t mean that the rules won’t apply. The Centrelink assessment of super for those below Age Pension age is well worth understanding when considering your retirement income needs.