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FINA2209 - Financial Planning > Week 8 - Retirement Planning > Flashcards

Week 8 - Retirement Planning Flashcards

1
Q

What are the conditions of superannuation release

A
  1. Reaching preservation wage and retiring
  2. Reaching preservation wage and beginning retirement transition
  3. Ceasing employment on or after 60
  4. reaching 65
  5. Compassionate grounds
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2
Q

What are the issues of retirement planning ?

A
  1. increasing cost of age care
  2. Tax minimization
  3. Longevity of super
  4. Age pension entitlement
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3
Q

What are the three types of superannuation benefits

A
  1. Preserved benefits
  2. restricted non-preserved benefits
  3. unrestricted non-preserved benefits
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4
Q

describe preserved benefits

A

Any personal superannuation contributions and gains

Available once a condition of realise are met

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5
Q

Describe restricted non-reserved Preserved benefits

A

Any employment-related contributions other than compulsory employer contributions

Available after a condition of release met

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6
Q

Describe unrestricted non-reserved benefits

A

Any benefits after a condition of release has been met

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7
Q

What are the three taxable components of a superannuation withdrawal

A
  1. Taxed element
    - 15% contribution tax already paid
  2. Untaxed element
    - no tax has been paid
  3. Tax free element
    - no taxed is owed
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8
Q

What are the factors determining tax paid on superannuation withdrawals

A
  1. preservation age
  2. Age when receiving the payment
  3. If tax has already been paid
  4. If withdrawal is lump sum or income stream
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9
Q

What is the low-rate cap?

A

230,000 maximum lifetime cap on the taxable component that can be taxed at the concessional rate

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10
Q

What are the two main retirement income screens

A
  1. Pensions (account-based)
  2. Annuities (non-account based)
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11
Q

What are the two types of pensions?

A
  1. account based pension
  2. Market linked pension
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12
Q

What are the two types of annuities?

A
  1. lifetime income stream
  2. Fixed-term income stream
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13
Q

What are the main advantages of annuities over pensions?

A
  1. protect against longevity risk
  2. Protects against inflation risk
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14
Q

What is the main advantage of pensions over annuities?

A
  1. flexibility of income
  2. residual balance passed on to bequests
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15
Q

What is a mean-variance efficient strategy?

What are its benefits?

A

two-part retirement plan

part 1: income stream
part 2: investment component

provides protection from inflation and longevity risk

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16
Q

What factors should be considered when making a retirement plan?

A
  1. Risk tolerance
  2. Life expectancy
  3. Health
  4. Goals
  5. estate planning
  6. returns
    7 regulations
17
Q

What are the three main types of transition-to-retirement (TTR) strategies?

A
  1. accessing extra income before full retirement
  2. Reducing working hours but maintaining income
  3. Boosting super contributions and drawing income
18
Q

What are the conditions of TTR strategies?

A
  1. reached preservation age
  2. Draw downs between 2% and 10%
  3. Pension is non-commutable
19
Q

What are two other TTR strategies

A
  1. downsizing
  2. Reversing mortgage

FINA2209 - Financial Planning (10 decks)

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