Why worry about retirement now?

For most employed people, your employer is required by law to pay a minimum of 9% of your salary into super. Over your working life, this adds up to a very large amount, which is why super is often your largest asset outside of your home. But why should you worry? Can’t you just live off the Age pension?

Currently, the Age pension offers a basic amount, which would leave most people struggling week to week. Take a look at your current basic spending on items like your phone, groceries, rent, or mortgage. Could you live comfortably on that amount and isn’t your retirement meant to be about enjoying life, travelling, helping the kids? Looking after your super now, could create a comfortable retirement in the future.

The Association of Superannuation Funds of Australia defines modest retirement as better than the Age pension, but still only able to afford fairly basic activities. If you want a comfortable retirement, where you can afford private health insurance, a reasonable car, good clothes and occasional holidays, then you’ll need even more saved up. It’s easy to see the difference between what you need in retirement and what the Age pension provides. This is why it’s important to start thinking about your retirement options now and work out if topping up your super is right for you.

Did you know super is taxed at a low 15% tax rate and when compared with the personal income tax rate of 31.5%, super becomes a tax effective investment, even more so if you’re in the top marginal tax rate of 46.5%.

For more information, talk to your advisor, download our flyer, How to get ready for retirement, or give us a call.