If there’s one thing certain about retirement it’s that you’re going to need money that will sustain your expenses and your lifestyle after you stop working. What’s more is that Australians are living longer than ever, making it essential to carefully plan for the future. Currently, men live until the average age of 86 and women until the age of 90. It may seem daunting to figure out where retirement money will come from, but the one thing to remember is your super.
Since 1992, compulsory supers have been in place. This means that you’ve either been putting money aside since then, or at least since you’ve entered the workforce. Your super is the vehicle needed in order to live a comfortable retirement, which is why it’s important to maximise it to its fullest and make sure that what you’re contributing is going to give you the retirement lifestyle you’ve worked so hard for over the years.
Let’s take a look at how your super will get you through retirement:
- After your first retire, you may have plans of travelling, or being more leisurely. Many people spend the most amount of money during the first half of their retirement years since they are still active.
- Once you start to progress in age, many people slow down and start taking it easy more often. Due to this, people tend to spend less money on things such as travel during the later years. However, once you do reach the later years, your expenses on medical care may go up, so it doesn’t necessarily mean that you’ll be spending less.
- On average, it’s said that a married couple needs around $60,000 per year, while a single person needs approximately $44,000 per year during retirement. These numbers reflect spending money on travel, mobile phones, broadband, insurance, a car and day to day living expenses. If you decide not to travel or spend money on technology and extras like gym memberships, you may need less than this to live comfortably.
- One surprising statistic is that if you don’t own a home and you’re a renter, you may need more money during retirement. This is because you may live in areas such as Sydney where the cost of rent is high.
- When you retire has a large impact on the amount of money you will need to live comfortably. Many people opt to work longer than they have to or work a part-time job after they retire to continue bringing in extra income.
Now that you know a little more about what goes into retirement and the considerations you need to take into account for your super, it may be time to seek out the advice of a qualified financial professional. A financial advisor can help you determine the types of investments in your super (balanced, growth or conservative) in order to help you reach your retirement goals. If you determine that you’re behind in saving for the type of retirement you desire, a financial advisor can also help you create a plan to catch up through salary sacrifices or other options.
Your superannuation powers your retirement and how comfortable you’re going to be able to live financially after you stop working. The sooner you determine your current path, the sooner you’ll be able to know if you need to make changes or if you’re on the right track.