Your retirement may seem like something to deal with in future if it's 30, 20, 10 or even five years away. But the fact is to ensure it's comfortable you're going to need a fairly large sum of money in the bank, so planning early on is absolutely essential.
A self managed super fund is an excellent tool to start building towards your retirement, if it's managed correctly. If you're not thinking about your retirement and your super fund, it's about time you started. The earlier you start and the better you plan, the more comfortable your later years will be.
Are Australians doing enough for their retirements? And how much do you really need? We have a closer look at superannuation and retirement to help answer these vital questions.
How much do you need to retire in Australia?
The Australian Bureau of Statistics shows that the average age for retirement in Australia is 65 and the average life expectancy is roughly 85. If you're anything like the average Australian then you have to plan for 20 years of your life when you won't be earning any income at all. How much will this cost you?
Several factors will influence the cost, from the lifestyle you want to live, to the length of your retirement to medical costs. But, the ASFA estimates that for a single person a comfortable retirement will cost $43,062 a year, or $861,240 if your retirement is 20 years long.
If you're anything like the average Australian, then you have to plan for 20 years of your life when you won't be earning any income.
For a couple to retire comfortably the total cost seems a little more manageable at $59,160, or $1.18 million assuming a 20 year retirement. As you can see, retirement doesn't come cheap.
While living a modest lifestyle could reduce the above costs, it's likely that you'll still need at least half a million to retire – a sum that certainly will require some planning to amass.
Is there enough in super?
The Australian Taxation Office's data on Super funds suggests that Australians retirement nest eggs are in fairly health shape. The median asset value is $338,336 or $602,629 for self managed super funds. Certainly short of a comfortable retirement for one, but getting close.
The Mercer Global Pension Index 2016 paints a similarly positive picture about our superannuation scheme indicating that for adequacy, integrity and sustainability our scheme ranks as the third best in the world. With the knowledge required to best use our excellent system your retirement can be fully provided for.
You might already have a decent sum in your superannuation or SMSF, but do you have a plan? Ashfords has been managing super funds for over a quarter century now, and we know the ins and outs of the process better than most.
We can help prepare a detailed plan to reach your retirement goals and ensure that your later years are as comfortable as you deserve them to be.
What can you do?
Self managed super funds have a higher average value than normal super funds. This suggests that successfully managing your own fund could help you amass the funds necessary to retire comfortably.
The fact is though, a lot of time expertise is required to successfully manage a super fund and see the results necessary. Instead of spending hours and days learning the ins and outs of the system, let the knowledgeable professionals at Ashfords help grow your nest egg.
We've got a proven track record of building wealth for our clients, and can help make sure your retirement is long and lavish. Get in touch today.