Your parents might be saying it, your older sister might be saying it, even your bosses might be saying it. “Have you thought about how important your super will be in retirement?” We hear but do we actually really listen? Do we really consider what they are talking about?
Sometimes I get calls from people in their mid-50s telling me they are ready to start thinking about saving for retirement. Now this is fine. I am more than happy to help. But I can guarantee every one of those people would have loved the opportunity to know then what they know now. It is never too early to plan.
But will it really make that much of a difference?
Well Luke is 33 years old and currently has his super in a retail fund. He earns $90,000 a year and only makes his standard Superannuation Guarantee contributions from his employer. His current balance is $45,000 invested in a balanced portfolio.
If Luke wishes to retire when he turns 65 he would retire with approximately $366,000 based on the ASIC Super Calculator – check it out here.
This would only give him a retirement income of $21,500 per year based on his life expectancy.
Let’s say Luke started salary sacrificing $5,000 a year now from his employer and can contribute an additional $1,000 a year from his after tax money. Luke could retire with $554,000. This is a substantial increase from just putting a little extra away a year. In addition to this, by salary sacrificing Luke will save $2,175 in tax every year based on the current tax rates.
Now that sounds more like it!!! I don’t know about you but when I retire I want to be able to do things I love most. And I will need some smartly saved money to do it with.
So if you’re ready to start planning your future contact us now.
Check out some more case studies in our website using the link below.
|This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.|