Tip #1. Start planning for your retirement well before the intended retirement date. Seeking advice 5 - 10 years in advance is often ideal and start by setting some realistic goals. A second opinion should always be considered.
Tip #2. Think very carefully before deciding to contribute more than 5% to the CSS Scheme or rolling over external superannuation benefits into the CSS. There are often other strategic investment alternatives to consider.
Tip#3. Always consider salary sacrifice to super as part of a long term retirement strategy and explore options to turn your personal super into a pension from age 60.(The pension paid is tax free and salary sacrifice can perhaps be increased even further!).
Tip#4. Understand the risks and always consider all alternatives under the 54/11 option which can include asking your employer to increase your salary for superannuation purposes so that you can work on without financial detriment.
Tip#5. Don't assume that the 54/11 option is no longer relevant or important now that preservation ages are increasing to age 60 over the next few years. A CSS benefit can still be preserved before 55 and claimed at age 55.
Tip#6. When you are planning for retirement, always understand the implications of remaining invested in the Default Option if share markets fall. The Cash Investment option can sometimes be an important choice to consider.
Tip#7. When you are ready to claim your CSS benefit, tread very carefully with Financial Advisers who recommend in-house superannuation and pension account options as they may cost you very dearly in the long term.
Tip#8. Don't assume that Industry super funds are the most cost effective investment option for you for your current and future needs. Industry pension fund costs are not always the same as the Industry super fund costs and Industry fund costs in general can vary significantly between providers
Tip#9. CSS members should always consider additional and comprehensive insurance cover in addition to any CSS entitlements.
Tip#10. Don't assume that your CSS employer contributions count as the full 9.5% of your salary toward your relevant superannuation concessional contribution cap. Also, don't assume that your 5% personal contributions to the CSS count towards the concessional cap.
Tip#11. When salary sacrificing to super, always consider whether it is more tax effective for your spouse to salary sacrifice than you. Also consider splitting contributions with your spouse if appropriate.
Tip#12. Under the Age Retirement Option, your salary for superannuation purposes used to determine your final benefit is based on your last day of service and not your birthday. The rules for the CSS are different to the PSSdb.
Tip#13. Don't underestimate the benefit of performing Higher Duties for a continuous period of 1 year and one day or longer. It may allow a higher salary for superannuation purposes to be permanently locked in, indexed in the future and then used in your final retirement benefit calculation.
Tip#14. Always check your final retirement benefit calculation to ensure the superannuation salary recorded is correct. CSS rely on information from Payroll Departments and errors can be made.
Tip#15. If you are made redundant over the age of 55, always consider the option to preserve your benefit before claiming your pension benefit as it may provide a significantly higher retirement pension. The calculation used in this scenario is the same formula that is used in the 54/11 benefit calculation.
Tip#16. Don't let work colleagues be your primary source of Financial Advice. In the long run, this often proves to be a poor choice through misunderstandings and missed opportunities.
Tip#17. In retirement, deductible superannuation contributions may assist with tax planning for CSS pension recipients in some circumstances.
Tip#18. Don't be naive in assuming the new Transfer Balance Caps and Transfer Balance Credits will not apply to you in retirement. CSS Defined Benefit Pensions are highly valued for the purpose of Transfer Balance Caps and Transfer Balance Credits, and this can be a real problem for retirees from senior positions or with long periods of Public Service.