Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –http://www.financialservicespartners.com.au/information/disclaimer
Setting the foundations
At some point in our lives, preferably sooner rather than later, we will stop working and start digging in to our hard-earned and hopefully well-saved retirement savings which includes superannuation. Saving for retirement is always a topical, widely discussed issue, and we all want to know will I have enough? What strategies could I consider that might boost my super?
With suitable advice and an investment strategy in place, you could improve your retirement lifestyle and reach your retirement goal sooner.
Consider your retirement goal
The question of how much is enough, is one that we might consider when we are reviewing our superannuation savings and investment goals. The amount we plan to have at retirement should reflect the type of lifestyle we want to have in retirement.
In August 2012, the Association of Superannuation Funds Australia1 released a report with new figures detailing the cost of living in retirement. According to national figures in the report, couples seeking a ‘comfortable’ retirement need to have $55,213 pa at their disposal, while those seeking a ‘modest’ retirement lifestyle need $31,760 pa. For singles, the required amounts are projected as $40,391 pa for a ‘comfortable’ lifestyle and $22,024 pa for a ‘modest’ lifestyle.
The survey estimates the annual spend by Australians who own their home, and are funding either a ‘comfortable’ or ‘modest’ standard of living in retirement. It provides categories of activities with anticipated expenditure to demonstrate what couples and singles would need to have saved in order to support their desired retirement lifestyle.
A ‘modest’ retirement lifestyle is better than the Age Pension2, but still only focuses on the ability to afford fairly basic activities whereas a ‘comfortable’
retirement lifestyle allows a broad range of leisure and recreational activities with a good standard of living through the purchase of items such as household goods, private health insurance, a reasonable car, nice clothes, a range of electronic equipment, domestic and occasionally international travel.
It would be fair to assume most Australians would be aiming for a ‘comfortable’ retirement lifestyle so would want to know what they can do to achieve this, which is where seeking professional financial advice and conducting regular reviews of your superannuation plan could be of benefit.
Strategies to consider:
• What additional contributions could be made to the superannuation fund?
• Could contributing too much to super exceed the concessional contribution cap and what are the implications of this?
• What type of superannuation fund is the right strategy, for example, self managed, industry or retail?
• How does the selection of asset class for investments, for example property, Australian shares, International shares, cash etc, impact the overall investment outcome?
A good plan can give you a little peace of mind in considering what you might be spending your money on in your golden years and if you will be able to afford it.
If you feel you, or a member of your family, would benefit from a review of your retirement plan and a discussion around what more you could be doing now to enjoy a long and fulfilling retirement later, why not contact our office and make an appointment
to discuss your individual situation and options? We would love to hear from you!
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1 ASFA Retirement Standard, June Quarter 2012: http://www.superannuation.asn.au/resources/retirement-standard