Super – a little more now,
a whole lot later
Super has an amazing ability to turn something very small into something very big. By adding just $30 extra to super each week, a 35 year old investor earning $45,000 per year could be around $170,000 better off by the time they retire.
The difference $30 can make
Thanks to some favourable tax breaks and the power of compounding interest, adding a little more to your super today could help you turn it into a whole lot more by the time you retire.
Most Australians will enjoy a long life. You may live until your eighties. You could see out your nineties, and that's definitely something to celebrate - especially if you have a decent retirement lifestyle. But it also means you will need sufficient savings to last fifteen, twenty, even thirty years from the day you stop working.
When we're in the workforce, retirement can seem a long way off. As with any issue that belongs to the distant future, we often put plans for superannuation on the back burner. But adding just a little extra to your super today could make a substantial difference to your wealth in retirement. Consider these three scenarios.
By adding just $30 extra to super each week, a 30 year old investor earning $40,000 a year could be around $260,000 better off by the time they retire. Similarly, a 35 year old investor earning $45,000 per year could be around $170,000 better off by the time they retire and a 40 year old investor earning $50,000 per year could be around $110,000 better off by the time they retire.
Some people think the age pension will support us when our personal super savings run out. But is that really where you see yourself in retirement? A couple receiving a full age pension today has to live on $505.70* per fortnight. That's about $253 per person, per week. So, yes you can get by on it. But only just.
To find out more
Find financial advice on super?
Need a financial adviser or just want to talk through your options? At BT we can give you general and limited advice on how to invest your super. Or we can help you find a registered financial adviser who can help you with personalized financial advice. Just call us on 1800 104 800 to discover how your choice of investment options could boost the value of your super fund.
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Get Financial Advice
No one is an expert on everything. When it comes to the most important things in life, good advice can be a good investment. Find out more about financial advice - where to go, what to ask, and what to expect.
Things you should know
All figures based on retirement at age 65, 9% employer contributions, earnings of 6% per year, net of fees and taxes in today’s dollars. All other fees and charges ignored except contributions tax of 15%. $30 post tax contribution (top up) per week equals $1560 per year, and attracts government co-contribution. You should consider your personal objectives, financial situation and needs before acting on this information. Past returns are no guarantee of future performance.
*Source: Centrelink, Australian Government Department of Human Services, current as at July 1 2011. These amounts exclude the amount which is currently a maximum of $58.40 a fortnight for singles and $88.00 a fortnight for couples (combined).
