“How much super should I have?”
As financial advisors, we often get asked a tricky question: How much super should I have? It’s not always easy to give a simple answer.
One way to figure it out is by looking at the national average. This means considering things like gender, how much money you make, how much you put into your super each year, how long you’ve been working, and how much your super grows over time. It’s a bit like painting with a broad brush – it gives you a general idea.
This table shows some average super balances for men and women of different ages.
How much super do you need?
After seeing those numbers, you might wonder: “How much super do I really need?” It’s another simple question with a complicated answer.
Many financial experts used to say you needed $1 million for retirement – a nice, simple goal. But in reality, that number was often too high and impossible for most Australians to reach. Especially if you only started saving for retirement later in your working life.
This could make people feel stressed and put off their retirement plans if they weren’t close to that “magic number”.
To figure out what you really need for retirement, start by thinking about how much money you need each year. This is important because it’s likely you’ll need a similar amount when you retire.
Next, think about any big expenses you’ll have in retirement. Maybe you’ll need to buy a new car, go on a long-awaited vacation, pay off some debts, or help your kids with a home deposit. These things can affect your retirement plans.
Lastly, consider if you’ll get any government support like the Centrelink Age Pension. Look at what you own and what income you might have during retirement, like rent or dividends. Depending on your situation, you might qualify for some or all of the Age Pension.
If you find out you don’t have enough money for retirement, don’t worry! There are things you can do to boost your superannuation. Depending on how soon you plan to retire, you could try one or more of these options:
- Put some of your salary into your super (this is called salary sacrificing)
- Make extra contributions that you can claim as a tax deduction
- Put money into your super from your own pocket after paying taxes
- Have your spouse put money into your super
- Get extra money from the government by making contributions yourself
- To see if your retirement plan is on track, you can use retirement calculators that are available online. These tools can help you see how much money you might have in your super when you retire.
If you’ve tried all these things and still have questions about your retirement, you can talk to the team at 360 Financial Strategists. We’re here to help and can give you advice on what to do next.
In need of expert guidance for your super rates? A financial advisor can guide you in making the right financial decisions.
To find out if our strategies are right for you, feel free to contact 360 Financial Strategists online or on 03 9427 0855.
