retirement income strategy

Are you retired or approaching retirement? This information may help decide how you can maximise this time in your life.

 

retiring is the destination, but the journey starts well before we get there

 

We save for it throughout our working lives and want to make the most of these savings when we’re able to convert them into an income. 

At HESTA, we're always looking to improve retirement outcomes for our members. After all, this is why we exist. So we’ve set out a plan that identifies and recognises the retirement income needs of our members and our plan to build the fund’s capacity and capability to service those needs.

HESTA’s retirement income strategy outlines our plan to assist members approaching and in retirement to achieve and balance three objectives.

  1. to maximise their retirement income
  2. to manage risks to the sustainability and stability of their retirement income
  3. to have some flexible access to their savings during retirement.

 

 

a few things to explain

 

HESTA considers this to include both:

1.    after-tax income drawn from your HESTA account, and

2.    any entitlement to the Age Pension.

We’re mindful that our members have individual accounts, but about 70% of retirees retire as part of a couple. This can affect your income and entitlements, so we now offer couples advice planning sessions if you need help.

HESTA considers this to be the length of time from when members are first eligible to access their super, which is called their ‘preservation age’, and covers the rest of a member’s natural life.

Of course, this will differ for everyone. And it's hard to predict!

Preservation age is the earliest a member can transition into retirement, which is earlier than most people actually retire. This age allows a longer investment time horizon and represents a more conservative view of how much you may need.

We’re also aware that people don’t necessarily ‘retire for life’ anymore and can restart employment if the need, opportunity or desire arises.

Our Retirement Income Strategy has been developed to reflect the specific needs of our membership and the challenges our members face now and into retirement.

This strategy is focused on members aged 45 and above. Our research and insights show that this is the age that engagement with super and retirement planning starts.

Using our deep insights into our members, we’ve defined member groups for this strategy based on preparedness for retirement. This is a critical factor in defining retirement needs, alongside life stage.

By focusing on how prepared for retirement a member is, we can consider different members circumstances, and most importantly their needs.

We can then offer products, services and tailored levels of engagement that can help you achieve your retirement objectives.

Our approach has been designed to enable us to:

  • support members approaching retirement, or in retirement, to achieve more financial control and independence to balance their retirement objectives
  • offer effective communication and provide tailored support based on members' needs
  • provide members with a range of products, services and experiences appropriate for their situation
  • engage and guide members to take action to improve their preparedness for retirement
  • help our members and their partners make better decisions – from developing our products and services to offering experiences via the most appropriate channel.

Key to our strategy is understanding the solutions we outline for each group. This will form a starting point for engagement and guidance, with the potential for members to transition between groups and associated solutions as we learn more about you.

 

 

 

If your super balance is not where you would like it to be, HESTA can be your guide and support you with your retirement. That includes helping you build financial awareness and capability. We can help you feel more financially confident so you can make informed decisions about your retirement lifestyle.

You may be able to rely on the Age Pension once you're eligible, which can protect you against various risks over time. The HESTA Income Stream can be used to supplement pension payments. It provides flexibility and risk management and may be appropriate for you in retirement.

The HESTA Income Stream provides:

  • a unique Ready-Made strategy that de-risks a member’s investment portfolio over time
  • ability to vary income drawdown amounts, subject to legislated payment rules
  • ability to withdraw lump-sum amounts in addition to the regular income payments
  • access to ten investment options, with varying risk and return profiles, targeting investment returns above inflation (to address inflation risk and market risk)
  • ability to index regular payments to inflation.

Members approaching retirement with more than $50,000 in super savings can consider:

How can we help?

HESTA currently offers the following support to help you achieve and balance your retirement income needs.

  • Retirement Essentials – access to support on how to apply for the Centrelink Age Pension and Government Seniors Card
  • Retirement Hub – a central phone-based help service which offers information and general advice regarding key aspects of retirement
  • Future Planner – a digital advice tool that projects your likely income in retirement, with suggested paths to increase income in retirement for super members
  • access to links from HESTA's website to ASIC’s Moneysmart calculators
  • information seminars for members approaching retirement
  • personal advice on HESTA super, TTR and fully retired products offered face to face, by phone and via video conference
  • personalised communications for those wanting to engage and prepare for retirement, including how legislation can impact members
  • personalised communications to eligible retirees to see if a HESTA Income Stream is right for them
  • online interactive help with access to HESTA super advisers when you need it 
  • wealth-building/savings maximisation and education.

We're continuing to explore other benefits to offer to our members, which may include:

  • additional seminars for members approaching retirement and/or Age Pension eligibility age
  • further enhancing our digital advice tool, Future Planner, to provide members with expanded access to personal advice including for transition to retirement (TTR)
  • additional tools to help you manage your money and spending confidence in retirement. 

Members are looking for help to maximise and guide their wealth building while understanding what life in retirement might look like.

To best support you in maximising income and managing risks, the HESTA Income Stream provides flexibility and some risk management. It provides a suitable solution for converting your superannuation savings into an income stream in retirement.

One thing to consider is how long your money may last. You may also be eligible for the Age Pension. However, it's important to consider if this will meet your income needs during the retirement period.

 The HESTA Income Stream provides:

  • a unique Ready-Made strategy that de-risks a member’s investment portfolio over time
  • ability to vary income drawdown amounts, subject to legislated payment rules
  • ability to withdraw lump-sum amounts in addition to the regular income payments
  • access to ten investment options, with varying risk or return profiles, targeting investment returns above inflation (to address inflation risk and market risk)
  • ability for members to index regular payments to inflation.

Members approaching retirement with more than $50,000 in super savings can consider:

 

How can we help?

HESTA currently offers the following support that can assist you to achieve and balance your retirement income needs:

  • Retirement Essentials – access to support on how to apply for the Centrelink Age Pension and Government Seniors Card
  • Retirement Hub – a central phone-based help service which offers information and general advice regarding key aspects of retirement
  • Future Planner – a digital advice tool that projects your likely income in retirement, with suggested paths to increase income in retirement for super members
  • access to links from the HESTA website to ASIC’s Moneysmart calculators
  • pathway to retirement seminars for members approaching retirement
  • personal advice on HESTA super, TTR and fully retired products offered face to face, by phone and via video conference
  • personalised communications for those wanting to engage and prepare for retirement, including how legislation can impact members
  • personalised communications to eligible retirees to see if a HESTA Income Stream is right for them
  • online interactive help with access to HESTA super advisers when you need it
  • wealth-building/savings maximisation and education.

We are continuing to explore and investigate other benefits to offer to our members, which may include:

  • additional seminars for members approaching retirement and/or Age Pension eligibility age
  • further enhancing our digital advice tool, Future Planner
  • additional tools to help you manage your money and spending confidence in retirement.

 

We'll update our strategy regularly

This Retirement Income Strategy will be reviewed annually or whenever there is a material change in circumstances or regulations. The first review will be in July 2023.

A comprehensive review will be undertaken every three years in accordance with the requirements of Section 52 of the Superannuation Industry (Supervision) Act 1993. The review will gather any necessary information and will cover the appropriateness, effectiveness and adequacy of this strategy, including the assumptions underpinning it. 

 

 

 

need help to work through your options?

Our team is right here for you. Reach out to us today – it’s one of the benefits of being a HESTA member.