Do you have enough to keep the best of today?
The manner and means of retirement can be a serious cause for concern. Especially with all this talk about having to have at least $1 million in super savings to have a comfortable lifestyle. When you retire, would you like to travel? Go to the theatre and the cinema? Buy your family Christmas gifts? You would be forgiven if you wanted to avoid the question altogether, but help is at hand!
The Association of Superannuation Funds of Australia (ASFA) have said that retiree couples who rent would need $1,166,000 in super savings at retirement to live at a comfortable standard but if they owned their own home they would need the much lower figure of $640,000.
The ASFA defines this comfortable living standard as one that enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.
If you are eligible for Age Pension and are willing to be more modest in lifestyle; foregoing on treats, travel and entertainment, you can probably get by on a lot less. Although it’s not likely most would opt for this given the choice. So what can you do? Regular savings and growth in investment returns is crucial to a healthy retirement fund but it should be remembered that post retirement investments can be equally, if not more important. Avoid taking a lump sum super payment and instead stay invested. Also note that small amounts of super go a long way, a balance of $50,000 can mean about an extra $2,500 per year on top of an Age Pension while the fund still modestly grows.
While at the other end, a super worth $800,000 and an investment property worth $500,000 (rental income +/- $26,000) can result in +/- $35,000 per year while the super grows healthily.
Which ever way you look at it, the sooner you get in touch with a financial advisor the better. Not just for pertinent advice but to build a rapport so they get to know you, and you them, because it is important to review your options and the best plan for drawing on your savings during your retirement.
You can chat to Louise on 1300 LYFEGROUP or email her here to set up a one to one for further advice on financial freedom.
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