There’s no need to worry so much

Sandra has enough in super and savings so ...

QI am 54 and am concerned my income over the next 13 years will not continue, as it has severely reduced. I have some funds invested in ETFs and cash totalling $275,000 and own my own home. I have a total of $547,000 in superannuation, mostly in Hostplus Indexed Balanced Fund and also some in the Public Sector Superannuation Scheme ($178,000), which they tell me will pay a pension of $17,000pa. (I worked for a government department for just shy of 10 years a long time ago.)

I can live on $27,000 net, have another $60,000 in cash, which I can use to live on and would keep me going for a little while, and intend contributing $25,000 to super this financial year.

So when can I officially retire, which I am worried about doing? When can I access my super and can I work, say, on a part-time basis while retired? Sandra, I am very pleased you are taking this issue seriously but on the face of it you are over-worrying. You have given me the key number I need, namely you can live on $27,000 a year. Your Public Sector Super pension would be $17,000, so you need another $10,000.

Putting aside the PSS amount of $178,000, you have $369,000 in super and $275,000 in exchange traded funds and cash and another $60,000 in cash, a total of $704,000. In a diversified portfolio, it is conservative to estimate that this would earn 2% to 3% above inflation, let’s call it 2.5% or an average of some $17,000 a year.

Take that $17,000 and add it to your $17,000 pension and you are at $34,000 already. And remember, this is drawing only 2.5% a year from your savings. I just can’t see a problem, which is great for me and even better for you.

As always, if in doubt seek professional personal advice.