super fund

Since COVID-19 we have noticed a large spike in young people worrying about their super and wanting to learn more about what they can be doing to optimise their retirement savings. Let’s have a look at a couple of small ways you may benefit from putting a bit extra into your super fund.

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 Kelly is 33 years old and currently has her super in an industry fund. She earns $90,000 a year and only makes her standard Superannuation Guarantee contributions from her employer. Her current balance is $45,000 invested in a balanced portfolio.

If Kelly wishes to retire when she turns 65 she would retire with approximately $483,000 based on the ASIC Super Calculator.

This would only give her a retirement income of $38,000 per year based on her life expectancy.

Let’s say Kelly started salary sacrificing $5,000 a year now from her employer in addition to contributing $1,000 a year from her after tax money. Kelly could retire with $723,000. This is a substantial increase from just putting a little extra away a year. On top of this, by salary sacrificing, Kelly will save $1,725 in personal income 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.

Check out some more case studies in our website using the link below.

Building your super fund balance.

And if you have any questions regarding your self managed super fund you can contact us here.

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.