Academics and Early Retirement
If you work for a University in Australia it is safe to assume that some or all of your nest egg is with UniSuper.
For the lucky few this means you are part of the last guaranteed income streams left in this country. As time goes on these are likely to be preserved for politicians and public servants only.
So how do we assess the viable paths forward if offered early retirement?
Firstly, assess the terms attached to the offer.
A potential offer may require a period of unemployment before you are allowed to return to the work force. If forecasting your cashflow is not your idea of fun, you should seek advice and get a estimate of your future lifestyle. It would be comforting to know the difference between leaving early, staying on, and scenarios in between.
Secondly, are you given early access to a guaranteed income stream?
Getting access to a risk-free guaranteed income is a good day for anyone. UniSuper may offer a forecast of what you would receive annually if you stayed until a certain point in time. An advisor or accountant may also assist with an estimate. A logical decision-making process would dictate a comparison of the two. It’s important to know the opportunity cost of leaving early. Please note this may be a moot point if you aren’t entitled at the time of offer.
Thirdly, always prepare for the worst.
Some of the best advice I have received was to look at the exit terms of any contract and be comfortable with them before looking at the upside.
Retirement is no different.
After your assessment, if the end result leaves you unable to meet your retirement expenses you may be left with two options.
1. Spend less. Or 2. Return to work.
If this doesn’t meet your definition of early retirement it would be Wise to seek a second opinion.
“Unless specifically indicated, the information contained here is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial advisor.”