Every Australian worker has two sometimes confusing but necessary things in common – superannuation and taxation. Recently, super has become a hot topic with sides forming to debate whether or not compulsory super is actually beneficial. The proposed launch of a government default fund called ‘My Super’ has fuelled the fire, and people have started asking questions like whether or not they should be able to choose where their money is invested. Some have even gone as far as suggesting that they’d rather have their super money go into paying off their home loan. It’s no surprise that people are more invested in the “here and now” than in the future, but what I want to tell you is why it’s critically important to save for retirement.
For most people, the more money you have, the more you spend. It has clearly been the government’s desire to see that we save for and fund our own retirement, at least in part. In the absence of our own savings we are forced to fall back on Centrelink benefits in the form of the old age pension. While Centrelink funds might be sufficient, many of us have laboured our entire lives to retire in some form of comfort – we yearn to travel, spend time with the grandkids, and do things we’ve been unable to do in our working lives. So if that is the case, how much is enough for you to retire on?
The most recent ASFA Retirement Standard suggests that a couple in retirement need $54,954 to live ‘comfortably’. In other words: to have a good standard of living, a life of leisure and enough money to be comfortable. To live a ‘modest’ lifestyle according to ASFA the figure is $31,519. How do these figures compare with what you’re planning on spending in retirement?
It is true that through the GFC there has been much focus on the poor performance of superannuation funds. But during the GFC, nothing was bullet proof. Assets like Australian and international shares all performed poorly. If we learned anything from the GFC it was the importance of asset diversification and maintaining a balanced investment portfolio.
A lot of people think they know the answers, and if anyone really knew what was going to perform best, we wouldn’t have to plan for retirement in the first place. In my opinion, your future is yours and yours alone, so it’s up to you to make the right decisions. Talk to someone who can help and start planning for tomorrow today.
Harold Dakin
Yellow Brick Road Double Bay
Royal Arcade 5a, 401-7 New Sth Head Rd, Double Bay NSW 2028
m 0488 857 888
t (02) 9360 8888

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