THE MYTH OF SUPER: WILL YOUR SUPERANNUATION REALLY LOOK AFTER YOU?
Your Superannuation fund, or as most people call it ‘super,’ can have different meanings to individuals. For most Australians, it’s simply retirement savings to supplement their Age Pensions. But for others, it’s more than that. It’s the goal of being able to retire early; to reap rewards after a life of work. It’s setting themselves up for not just living without the need to work, but to truly enjoy the time off that they have earned.
If you are in the latter group, like many APFG clients who are generally prone to thinking more about earnings and savings, do you know if your super is enough? But more specifically, ask yourself two questions:
- Can you retire at the age you want to retire?
- And what kind of life will your weekly spending afford for you?
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We can connect you to a team of financial advisors who can quickly give you an estimate of how your super is tracking.
In the below example, we illustrate how someone who may have been saving since the age of 20 can estimate their amount for super if this individual wants to retire early at the age of 55. This example assumes your super is in a high-growth fund with associated risks.
| Questions to Consider | Example Responses |
| How old are you now? | 40 |
| At what age do you wish to retire? | 55 |
| How much is currently in your super? | $200,000 |
| Years remaining to reach retirement | 15 |
| How much do you earn each year? | $100,000 |
| Yearly estimated super contribution (10%) | $10,000 |
| Total to be contributed to super (yearly x years remaining) | $150,000 |
| Total Super At Desired Age of Retirement (Current Amount + Additional Super + Estimated Capital Growth in a High Growth Fund) | $450,000 |
In the example above, $450,000 may sound like a substantial lump sum. However, if the person hopes to live another 30 years, that $450,000 will only amount to an income of less than $300 per week.
“More and more we are finding that clients don’t know, and are shocked to find out, that with their current situation and planning, their super just isn’t enough,” says APFG CEO Matt Sully. “They find that their weekly budget when they retire will only be $300-$400 per week. That’s a lot of beans on toast. It doesn’t afford any room for travel, gifts for partners and families, and really enjoying their golden years.”
When looking at the example above, in order to have more flexibility or spending every week, this individual would have to work much past the age of 55, to at least the age pension threshold of 67, that’s another 12 years! This is becoming more common, as more Australians realise that in order to retire with a better lifestyle, they must work longer into their later years, through their 60s or into their 70s.
Other ways to increase super and retirement savings would be to increase contributions every month or year or supplement with other investments.
If you would like to talk more about your super, contact our team and one of our affiliated financial advisors can give you a free evaluation. At APFG we have many solutions for savings, investments that can build you the nest egg and peace of mind when planning for your retirement.
As always, any advice given is specific to each individual and you should seek independent financial advice before taking up any offers to improve your future wealth and prosperity.
