Superannuation continues to be the most important retirement vehicle for most Australians. Our role is to assist clients understand their retirement priorities, implement smart superannuation strategies and support them in taking a more pro-active role in managing their superannuation funds.
According to the Association of Superannuation Funds of Australia (ASFA), we are a world leader with our current superannuation system. However, there is still some confusion and apathy towards super and no doubt changes will need to be made into the future to account for the needs of our population as more and more people enter their retirement years.
Unfortunately in recent times we are reading and hearing more and more about hardship cases of retirees simply running out of superannuation and retirement funds due to various reasons including; increasing cost hospital & medical care, food, electricity, water and other cost of living expenses. In many of these cases, retirees are only left with Centrelink Benefits to help them pay their rent, pay for food and meet their bills and other lifestyle expenses.
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If you are self-employed you can enjoy significant tax incentives through deductibility of super contributions. We can show you how to structure this to make the most of benefits available and remain within the limits set out by the Government.
How much super do you need?
Working out how much money you will need in retirement depends on your personal situation. Not only does the amount of money you need depend on your lifestyle choices, but you may have some other income options in retirement (such as part time work, payments from other investments or the Aged Pension) which will supplement your super.
But you need to think about how much you’ll need early enough to do something about it. If you own your own home, a rule of thumb is that you'll need two-thirds (67%) of your pre-retirement income to maintain the same standard of living in retirement.
The Association of Superannuation Funds of Australia (ASFA) provides an industry retirement standard. This estimates how much money you'll need, depending on your lifestyle.
|ASFA Retirement Standard||Comfortable lifestyle||Modest lifestyle|
|Single||$43,687 a year |
$837 a week
|$27,902 a year |
$535 a week
|Couple||$61,909 a year |
$1,186 a week
|$40,380 a year |
$774 a week
^ Source: ASFA, June quarter 2020
ASFA estimates that the lump sum needed at retirement to support a comfortable lifestyle is $640,000 for a couple and $545,000 for a single person. This assumes a partial Age Pension. ASFA estimates that a modest lifestyle, which covers the basics, is mostly met by the Age Pension. They estimate the lump sum needed to support a modest lifestyle for a single or couple is $70,000.
Unfortunately some Australians are still not planning or saving enough for retirement and may be thinking you can rely on the Government Aged Pension. However as at September 18, 2020 the full Aged Pension is only approximately $37,014 per year for a couple and $24,554 for a single person. So the chances are you’ll need a lot more money to pay your bills, meet your lifestyle commitments and fund the retirement you have always dreamt about.
How can I take control of my superannuation and retirement plans?
Select Advice Financial Planning can tailor a personalised superannuation and retirement plan to meet your lifestyle priorities in retirement.
We will take you through a comprehensive retirement and funding gap analysis and in partnership with you determine the most appropriate superannuation strategies to implement for you. We will also act as a financial mentor once the superannuation strategies are implemented and be there to advise and support you along the way.
Whether you want more control through establishing a self-managed superfund or you require a personalised superannuation portfolio to be set up, we can help you take control of your superannuation and retirement plans today.
To seek advice about your superannuation needs, discuss smart superannuation strategies or for more detailed information on any of the topics discussed in this section, please contact us today and we will make a an appointment to assist you take control of your superannuation and retirement plans.