Your mining industry retirement checklist. Why it is important to think ahead and what to know.
If you’re a young worker with a mining job and a big salary, it is likely you’ve not given much thought to your eventual retirement.
But that’s not a phenomenon restricted to the young. Regardless of age, many of us are guilty of not thinking ahead in our financial planning. We live in a safe country, the mining industry in Australia has great employment opportunities, there’s an old-age pension, and most of us think that the system will look after us.
But what if it doesn’t? The rules are already changing.
Hooray for a shorter retirement
On 1 July 2023 the retirement age in Australia was pushed back. For those born after 1 January 1957, you’ve had an extra six months added to your working life. Meaning you are expected to work until age 67.
The retirement age used to be 65 and attempts to take the retirement age to 70 a few years ago were quashed in the Senate. But the concerning reality is that now that the idea is out there, it’s likely to surface again. It’s time to take retirement planning seriously so that you are best set up for whatever the future holds.
Planning ahead for retirement
Now, we are certainly not financial advisers, but we do work with people in their careers day in and day out. We have many conversations on the topic of retirement, which usually end with admissions of regret for not planning ahead. Obviously, you should speak to a professional, but here are some of the sorts of things you’ll need to talk to them about:
- What kind of lifestyle do you want for your retirement?
- How much is that lifestyle going to cost?
- Will your current super contributions and retirement savings accommodate the lifestyle you want in your retirement?
- If the answer to that last question is “no”, then you need to think about how you’re going to cover the costs of your retirement lifestyle.
Life admin to help you get clarity
Dealing with retirement planning can be paralysing. With more than $16 billion estimated to be floating about in unclaimed super, it is frighteningly apparent that Aussies aren’t cleaning up their financial loose ends.
RELATED: Financial tips for FIFO workers
Here are four housekeeping tips to help you get clarity on your super and retirement fund situation.
- Supply your TFN to your super fund
If your super fund doesn’t have your TFN, your concessional (before-tax) contributions are hit with penalty tax, and you won’t be permitted to make non-concessional (after-tax) contributions. You will also be excluded from the co-contribution scheme.
- Combine your super accounts
Combining super accounts not only forces you to track down any lost super, but it can save you thousands in fees.
- Complete SuperGuide’s steps to super success
These steps start with the basics and work you through the main points you need to consider for all things superannuation, for any age.
- Consider additional contributions
Consider making concessional (before-tax) or non-concessional (after-tax) contributions. Your income will determine whether you make after-tax or before-tax contributions. Concessional contributions may be an attractive option if you pay more than 15 cents in the dollar tax, or if you want to offset a large capital gains tax bill. The annual non-concessional contributions cap is $110,000 for the 2023/2024 year.
Does the thought of working in your present job until retirement age fill you with dread? Maybe it’s time to find a mining job you enjoy, instead?