Superannuation: How much is enough?
Superannuation forms the cornerstone for most Australian’s retirement savings. Its existence is to help people save for retirement. Over 2020, the financial hardship caused by coronavirus, access to super may have been important to help make ends meet at a difficult time.
Superannuation is likely to be one of the biggest assets we’ll ever own and it’s never too early to start thinking about it. One of the most important steps in planning to save for retirement is figuring how much you will need to spend each year to live a comfortable lifestyle. Living a comfortable retirement lifestyle means something different to each person, in broad terms it includes a better standard of living (including better consumer goods) and more recreational activities such as some overseas travel. The Association of Superannuation Funds of Australia (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, assuming that you qualify for a partial Age Pension.
There are a whole host of factors that will determine your lifestyle in retirement – savings, tax, investment strategy and more, it is essential to understand your super situation. Recent changes allow most Australians who are eligible to contribute to super, to now claim a tax deduction for their personal super contributions made using after-tax money. There are other ways to boost retirement savings such as sacrificing pre-tax salary to super, government co-contribution, make a spouse contribution and receive a tax offset etc.
Staying on top of your super and the laws that apply can give you greater transparency and management over your retirement - regardless of how far off it may seem right now. Financial advice is a positive force in Australian lives with ‘90% of advised clients saying that accessing financial advice has left them in a better position financially and 89 per cent reported that receiving advice allowed them to live their desired lifestyle’.
Our Senior Financial Planners can develop a plan to help achieve the retirement you want.
Deputy Chair of Board
This article includes general advice only and does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making any investment decision. A copy of the PDS is available upon request by phoning Bank First Financial Planning on 1300 654 193.