A good financial plan will help you sleep at night

If we suddenly enjoyed a windfall financial gain, like winning the lottery, we all have pretty fanciful ideas about what we’d like to do with the money.

For many people, being able to access life savings accumulated in super could give them the chance to experience something similar. But when you get to access your super, will you cash it in?

According to research conducted by independent financial services research company, CoreData, for the Equip super fund, nearly half (45%) of its fund members are anxious about whether they have enough to fund their retirement. At the other end of the scale, just over 25% of members are confident about their finances.

Confident about their finances or not, many members (39%) do not know what they’d do with their super if they retired tomorrow and would turn to a financial planner for advice.

According to Equip’s Executive Officer, Strategic Marketing and Communications, Geoff Brooks, the research shows that members are becoming acutely aware of whether they’ll have enough super to meet their needs, especially as Australian life expectancy pushes into the mid-80s.

“People are starting to appreciate that their super benefit has to last an awful long time, perhaps 30 years or more – and it is making some anxious. Even in a fund like Equip, where average retirement benefits are relatively high, only a quarter of members are confident that they’ll have enough”, he said.

Equip’s research showed only 3.4% of members would choose to cash in their super if they retired tomorrow. Encouragingly, 24.6% of the 2,207 survey respondents said they would likely receive their super as a regular income, irrespective of whether they sought professional advice. It shows the super industry’s messages are sinking in.

“If people start thinking about super as income replacement rather than a windfall lump sum on retirement, they’re heading down the right track.

“But the industry must respond with a range of retirement products to enable people to construct an income and investment plan that suits them as simply as possible,” says Mr Brooks.

That is the aim of Equip MyPension, a product that includes a built-in income and investment strategy for those not under advice. It is an alternative to traditional account-based pension and annuity products offered by the industry.

But no matter what retirement solution you choose, you should consider how your super interacts with other benefits, such as any Age Pension entitlement you may have.

“This is where it starts getting tricky and where a trusted financial advisor can help people construct a financial plan that makes the most of what they have, including any welfare entitlements and taking into account any other assets they have outside of super.

“For example, Equip MyPension is modelled for people whose super benefit is between around $100,000 and $600,000 and whose super is probably the biggest asset outside of their family home. Not everyone fits this profile but, on the other hand, it might also work for others.

“There is not one size fits all solution when planning retirement. We suggest that your best investment when you retire is thorough research and getting professional advice if needed. You may be surprised at how quickly anxiety disappears when you have a sound financial plan,” Mr Brooks said.

This article has been sponsored by Equip Super.  All information has been prepared independently, by an independent writer at Starts at Sixty and presents interesting insights we feel, for our audience to understand.  For more information about Equip Super’s My Pension products please visitwww.equipsuper.com.au/mypension.