The Importance of Superannuation
We don’t talk enough about superannuation. It’s one of those things that we tend to want to think about later but planning for superannuation is crucial for a comfortable retirement life.
While we currently enjoy the benefits of a superannuation guarantee of 9.5% ( set to rise to 12% by 2025) the indications are that this rate may not be sufficient to sustain a reasonable lifestyle.
The Association of Superannuation Funds has estimated that a couple retiring today would need a lump sum payment of $640000 to sustain a comfortable lifestyle.
However, this may be too low for several reasons.
Life expectancy continues to increase. As it does, individuals will need to source income to sustain their lifestyle. It is estimated that in 40 year’s time, the number of people who will live to be one hundred will be thirty times the number of centurions alive in the nineteen seventies.
Additionally, this increased life expectancy will coincide with reduced numbers of people in the workforce – meaning that the aged pension will come under increased pressure.
$640000 seems to be an achievable figure, however, without careful planning the figure may in fact be out of reach. Women in particular are at risk of not building a sufficient superannuation nest egg for several reasons – they often lose the opportunity to save superannuation while they take time out to care for children and there is still a significant average wage differential between women and men.
We simply can’t afford to ignore planning for superannuation. Australian Finance Hub can assist you to begin planning for a comfortable retirement.