Retirement might feel like a lifetime away, but once you approach your inevitable career deadline it is too late to plan for a comfortable post-work life.
As the average life expectancy in Australia steadily increases into the 80s for both men and women, so does the need to ensure that you’re able to choose to retire comfortably. We aren’t all in a position to secure the age pension, so we need to invest a little time and research into retirement planning.
Poor financial planning—particularly for retirement—is unfortunately common for many. Currently, just one-third of retirees in Australia live on a comfortable level of income, while approximately half of people aged 65 years or older depend on the age pension to get by.
For those who like to crunch the numbers, here they are:
For a comfortable retirement, single people are advised to save $545,000 or $640,000 per couple according to the Association of Superannuation Funds of Australia’s Retirement Standard. It’s estimated that to live without struggling within each pension payment, singles will need close to an average of $43,000 in savings for each year of their retirement.
The figures are overwhelming, but it doesn’t have to be all doom and gloom. In fact, you can empower yourself through your superannuation if you spend some time and effort preparing. With some foresight and financial prowess, you have the opportunity to bolster your super and make it work for you in the long run.
Whether you’re under the age of 50 or over, there’s never been a better time to put a future-proof superannuation strategy in place.
Are you under 50 years old?
How does an early retirement sound?
You have the advantage of time on your side to earn an income– and coupled with that is the opportunity to save thousands that could enable you to leave the workforce earlier.
If you won’t be accessing your super for five or more years, you should focus on the total sum that your super will be worth when you plan to access it. Just like the value of your home fluctuates with the market, your super is similar in that it doesn’t matter what it is worth from day-to-day up until you withdraw it as a lump sum or start releasing regular payments.
The key to increasing your retirement savings is to engage a financial advisor who can help to identify a low-cost fund with appropriate asset allocation. Ideally you will have a well-diversified portfolio for your super, however, the exact asset allocation will depend on how comfortable you are with investment risk as well as how long you have until retirement.
By securing a fund that has low fees and the appropriate asset allocation, you can significantly improve your superannuation’s bottom line – potentially shaving years off your working life. In most cases, a super fund with low fees and costs will build your savings faster if it invests in the same assets.
Account fees can also have a major impact on the final payout of your superannuation. For a sneak peek into the damage fees can cause, you can use the Government’s online calculator. Engage an expert who can compare superannuation funds, shed light on hidden administration fees and costs and will ensure you’re getting your bang for your buck.
You may also want to consider making make extra super contributions to improve your super balance. There are several ways you can contribute to your super and a financial advisor can outline the most tax effective way for you to contribute.
While you’re studying your super, consider that the Government estimates there are 9.5 million super accounts with a balance of less than $6,000. If you’ve switched jobs, it’s well worth taking the time to check and consolidate your super accounts to make sure part of your money isn’t slipping between the gaps.
Are you over 50 years old?
It’s never too late to start planning to manage and grow your superannuation. In fact, now is the right time to consider meeting with a financial advisor to discuss your super.
There are plenty of superannuation strategies that you may not have considered that could help to make your retirement a prospect you look can forward to. For example, a lower risk, lower return strategy such as capital guaranteed or capital stable could suit you if you’re looking to withdraw soon.
Our specialists at Inovayt Wealth have proven superannuation strategies for all portfolios and can help you grow your nest egg. Contact us today for a free consultation to see how we can help place financial control back in your hands as you head towards retirement.
Should you require more information or clarity on any of these topics, please contact us today on 1300 354 355.