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Why you have to be smart with your super
Our aging continent
The Australian population is aging at a rapid rate. There are two generations currently heading towards or already in their retirement years – the World War II generation and the ‘baby boomers’.
Approximately 2 million of the baby boom generation is over age 501 and by 2041, 22% of the Australian population will be classed as ‘aged’ – that’s 5.5 million people.2
For the Federal Government this basically means they will be put under pressure in two major areas:
- The provision of the Age Pension; and
- Healthcare costs.
For the younger generation this means the range of concessions available to today’s retirees, may not be available to them in retirement. This also means current tax levels may not be sufficient to fund the living and healthcare costs of today’s retirees.
It is important now more than ever to manage your super effectively to help fund your own retirement.
How much is enough?
The average superannuation account balance in Australia is $57,000.3
Did you know that to provide an income of $30,000pa in retirement you need a superannuation lump sum of $370,000?
After 30 years employment on an average salary, receiving 9% in superannuation contributions from your employer, you will only achieve a lump sum of $167,000!
That’s about $19,800pa in retirement income!4
1Brand Management – “Horizon 2013 – The changing environment for financial services in 2013,” Presented to AXA Australia, November 2003
2Australian Bureau of Statistics, “Australian Social Trends 1994: Population – Population projections: Projections of the aged population,” http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/1647509ef7e25faaca2568a900154b63?OpenDocument – 26 November 2003
3AMP “Super benchmarks are inadequate,” http://www.moneymanagement.com.au/articles/bb/0c00eabb.asp – 10th February 2004
4Association of Superannuation Funds of Australia, Fact Sheet # 5, “An adequate retirement income?”http://www.superannuation.asn.au/Home/default.aspx– 9th February 2003
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