We all hope for a comfortable retirement. Increased life expectancy now means that more people look forward to their retirement years, and so it is important to make sure that you have properly planned for this stage of your life.
The key to success is to put plans in place as soon as possible to ensure you have adequate income to support your chosen lifestyle.
Retirement planning is not a one-off task. Once you have started a pension or other retirement savings, you should:
Review your plans regularly.
Make sure you are contributing enough to provide the retirement income you want.
Review your plans if your circumstances change.
For example, if you get a new job, become self-employed, marry or get divorced.
Review your plans if the pension system changes.
For example, the rules about how much you can save and the types of pension schemes you can have may change.
It is important to seek integrated advice when planning your retirement, as most people want to maintain the real value of their capital, minimize their tax liabilities and ensure that income is adequate, regular and safe.
At Intelligent Investments, our specialists will work with you before, and after you retire to review your situation and ensure that your needs are met.
Many UK expats stop paying National Insurance, NI, as soon as they leave the UK. This decision can have serious consequences as NI contributions are directly related to the amount of State Pension which is paid.
From 2010, according to new draft regulations, only 30 years of NI contributions will be necessary to guarantee a full UK state pension, as oppose to the current 44 for men and 39 for women. The state pension age for men and women will increase to 66 in 2024, 67 in 2034 and 68 in 2044. Each of these changes will be phased in over the two preceding years.
Filling gaps in your NI contribution record with Class 3 contributions, also known as 'voluntary contributions', is the first priority for anyone who is not on course to retire with a full basic state pension.
The state pension does provide a very cost-effective means of saving for later years, but cannot, on its own, provide an adequate retirement fund. Additional provisions must be made in order to guarantee as comfortable a retirement as possible.
Pension 'A' Day, on the 6th April 2006 heralded dramatic reforms as the Government attempted to streamline and simplify the pension system, in order to encourage individuals to save more. Research by the Association of British Insurers (ABI) in 2005 indicated that over 60 per cent of people are not confident that they will have enough money to live comfortably during their retirement.
One such move under the new rules designed to encourage us to save more, is the fact that everyone is now able to set up a self-invested personal pension (Sipp). Previously, you were precluded from having one if you were in an occupational pension scheme and earning more than £30,000 a year.
Major changes to Australia’s superannuation system were announced in May 2006, and are planned to take effect from 1 July 2007. Outlined in A Plan to Simplify and Streamline Superannuation, under the proposals:
Superannuation benefits paid from a taxed source either as a lump sum or as an income stream such as a pension, would be tax free for people aged 60 and over.
RBLs would be abolished.
The concessional tax treatment of superannuation contributions and earnings would remain. Age-based restrictions limiting tax deductible superannuation contributions would be replaced with a streamlined set of rules.
Individuals would have greater flexibility as to how and when to draw down their superannuation in retirement. There would be no forced payment of superannuation benefits.
The self-employed would be able to claim a full deduction for their superannuation contributions as well as being eligible for the Government co-contribution for their post-tax contributions.
It would be easier for people to find and transfer their superannuation between funds.
The ability to make deductible superannuation contributions would be extended up to age 75.
The superannuation preservation age would not change. The preservation age is already legislated to increase from 55 to 60 between the years 2015 and 2025. People would still be able to access superannuation benefits before the age of 60, although they would continue to be taxed on their benefits under new simplified rules.
In light of the changes and to ensure you have adequate provisions in place, your existing super should be reviewed. An ideal mix includes a 60:40 split between Australian and overseas shares.
If and when you decide to return to Australia, consider a self-managed super fund. This flexible and tax effective structure is similar to having your own investment company or family trust but better tax advantages.
Keep in mind your preservation age when you can access superannuation benefits. If you wish to retire before this, you will need to generate income from alternative sources until your super becomes available.
It is important to seek integrated advice when planning your retirement, as most people want to maintain the real value of their capital, minimize their tax liabilities and ensure that income is adequate, regular and safe. 
Many UK expats stop paying National Insurance, NI, as soon as they leave the UK. This decision can have serious consequences as NI contributions are directly related to the amount of State Pension which is paid.
The superannuation preservation age would not change. The preservation age is already legislated to increase from 55 to 60 between the years 2015 and 2025. People would still be able to access superannuation benefits before the age of 60, although they would continue to be taxed on their benefits under new simplified rules.
