retirement

Retirement funds shortfall: Manage your superannuation now to avoid it

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About 50% of older Australians could experience a huge shortfall when they stop working after conceding they have less than $100,000 of superannuation balance.

New statistics show 43% of Australians aged 50 to 70 years old have less than $100,000 of savings and 33% of them have less than $50,000 in their superannuation account.

Note that single retirees are recommended to have a balance of $545,000 to live a comfortable retirement. Couples, on the other hand, would need about $640,000.

Based on the new standard, couples around 65 years of age would need to spend around $60,060 per year while singles need around $43,700 a year to live a comfortable retirement. Fortunately, it isn’t too late yet for pre-retirees to manage their superannuation before they stop working.

The low balances may have stemmed from the constant changes in superannuation rules and general apathy around retirement but pre-retirees are encouraged to start paying attention to their superannuation now.

People may have invested outside of super so the low balances may not actually be their net worth. However, it is still important to seek advice on how they can boost their balance.

The increase of compulsory super payments may need to be fastracked to boost superannuation balances. It is said to incrementally increase to 12% by 2025.

Compulsory super has boost retirement incomes by 40% since it commenced in 1992. The system is still maturing but it keeps pension expenditure under control.

If you are a pre-retiree, you can boost your superannuation balance by checking if your employer is paying your super and if there is lost super, review your insurance coverage, especially if you have a family. Ensure that all your super is in one account so you can save on fees and charges.

Check your investment options and see if they match your risk tolerance and time horizon. Save as much as you can into super because salary sacrificing offers good tax benefits that can help you reach your retirement goals.

Superannuation is one of the best retirement saving vehicles so know your options for a tax-free retirement income, including a transition to retirement pension from super. Remember to keep track of your super and start early to take advantage of compound interest.

What can you do?

If you would like to know more about superannuation and retirement, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.

Whether you are a beginner, seasoned investor or business owner, we can give you guidance to maximise the financial areas of your life. We can give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.

Click here to schedule a chat or call any of our local offices near you.

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