A number of commentators suggest people previously considering retiring shortly should remain working now for a number of years – does this make sense when taking into account how long most people will be retired for, and how share markets should perform over the long term?

If the sharemarket performs exceptionally well, then any reduction in your account balance could be restored without needing to stay in the workforce and save more. However, no one can predict when the sharemarket will rebound and how strong its performance will be. If, therefore, you have the opportunity to continue working and save more from your income, this could be a prudent strategy. This could be reviewed depending on future market performance.

At age 55 is there any tax payable on the non-preserved amount of your super?

Prior to age 60, benefits received from a taxed super fund are potentially taxable. The actual tax payable will depend on a number of factors:

• the form in which the benefits are received (eg: lump sum or pension);
• the age the benefits are received;
• the components for tax purposes that you withdraw, and
• the amount withdrawn.

As a general rule, if you withdraw an amount as a lump sum between age 55 and 59, the taxable component above the first $145,000 will be taxed at 16.5%.

To find out whether you should withdraw some of your super and the amount of tax you’ll pay, you should speak to a financial adviser.

My next birthday is 66 and I am presently working overseas. Am I eligible to withdraw tax free the full balance of super kept with MLC? I have been with MLC for 12 years. Do you think it is a wise move to take now?

Given your age, you are eligible to withdraw the full balance of your super tax-free. However, we recommend you seek financial advice before doing so. This is because investment earnings in super are concessionally taxed, whereas if you cash out your super and invest elsewhere, your earnings are potentially taxable at a higher rate.

Furthermore, it may not be possible to get the money back into the concessionally-taxed super environment if you decide you want to do this at a later date. To be eligible to make super contributions at age 65 or over (up to age 75), you need to have worked at least 40 hours over a consecutive 30-day period during the financial year. You could also be constrained by certain contribution caps when getting money back into super.

I am 57 years old and still working full time, can I get my money from my superannuation now? If not the full amount (I have around $10 000.00) maybe part of that money? Could this be available at the moment?

You’ll generally not be able to withdraw your super as a lump sum payment until you permanently retire, reach age 60 and leave your employer, or reach age 65. You could however use your super to start what is called a transition to retirement pension. From this you could draw a maximum of 10% of your account balance each year. You should speak to a financial adviser to find out what’s the best strategy for you.

You keep saying to remain in the market, but you or nobody knows when it will start to return. I am receiving 4% income from my allocated. If I take my money out and invest in a bank and get about 5.5%, after tax I would get a return of the same amount and my investment would not go down as it is at the moment. Would this be good strategy to preserve my balance while the market is still falling?

You are right; nobody knows exactly when the sharemarket will recover. But it is worth remembering that investment earnings in an account-based pension are tax-free, as are income payments received from a pension investment at age 60 or over. Conversely, if you cash out your pension and invest the money elsewhere, your earnings are potentially taxable at a higher rate. If you want to retain the tax concessions and protect your savings from further losses, one option is to select a cash option within your pension. But before you move to cash within or outside of your pension, you need to keep in mind that you run the risk of missing out on the sharemarket recovery when it happens. You should speak to a financial adviser to talk through your options and work out what’s best for you.

I am a 23 year old and just starting out my super, what should I do?

Given your age and time until retirement, it would be a good idea to speak to a financial adviser to find out whether you should be making additional super contributions. If so, they will be able to advise you on whether you should be making these pre or post tax. Even if you decide not to make additional super contributions, they will also be able to advise you on which investments you should choose for your existing super based on your personal circumstances.

General Advice Warning: These comments contain general information and may constitute general advice. They do not take into account any person’s particular investment objectives, financial situation or individual needs. They should not be relied upon as a substitute for financial or other specialist advice.

Before making any decisions on the basis of these comments, you should firstly consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs, and secondly consider the relevant Product Disclosure Document.

Opinions expressed constitute our judgement at the time of issue and are subject to change.

Is salary sacrifice a good idea in these times as I want to retire in a year?

Regardless of market conditions, salary sacrifice is a tax effective way to save for retirement. This is because your super contribution is taxed at a maximum rate of 15%, instead of your marginal income tax rate which could be up to 46.5%*.

There could also be advantages to investing in super when markets are down. This is because share values are cheaper, so you can buy more with your contribution and capitalise on this when the market recovers.

You should see a financial adviser to work out whether salary sacrifice is the best way for you to boost your retirement savings. If it is, they will also be able to advise on what investments you choose to generate sufficient income for your retirement.

Having just retired, should I reduce my monthly payments in the short term?

If you draw less money from your pension, you’ll be leaving more money in your account to benefit from any upturn in the market. However it will, of course, mean you have a reduced monthly income, so you need to be comfortable that you have enough to live off. Speak to a financial adviser, as there may be other things you can do with your investments to help you through this period of market turbulence.

When you speak about long term do you mean 10-20 years? If so, then surely you should not be selling investments to a 50 year-old, as there is little point in being rich at 70 years old.

It’s important to remember that you are not just investing until you retire, but for the additional 20 or more years you could spend in retirement – a long-term time horizon by anyone’s standard. It’s therefore important to hold growth assets (like shares) in your portfolio as these investments have the potential to deliver higher long-term returns and so help you ensure your money lasts as long as you do. If you would like to review your investments, speak to a financial adviser.

I am 30. Should I ante-up and switch my balanced super into a geared growth fund if much of the recovery comes in the first 12 months?

Switching your super to a more aggressive fund would benefit you when the market recovers. However the trouble is we don’t know if we have reached the bottom of the market yet. The best strategy is not to make investment decisions based on short-term market cycles ― as this could make any losses worse. It is generally best to have a long-term investment strategy and stick to it regardless of what the market’s doing. To find out which investment strategies suit your goals, time horizon and risk profile, speak to a financial adviser.

General Advice Warning: These comments contain general information and may constitute general advice. They do not take into account any person’s particular investment objectives, financial situation or individual needs. They should not be relied upon as a substitute for financial or other specialist advice.

Before making any decisions on the basis of these comments, you should firstly, consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs and secondly consider the relevant Product Disclosure Document. Opinions expressed constitute our judgement at the time of issue and are subject to change.

* Includes a Medicare levy of 1.5%