The pitfalls of being average.

RetirementDid you know you need at least $800,000 in your retirement savings (in today’s dollars) to retire comfortably?

Unfortunately – for the majority of Australia’s 4.7 million pre-retirees – achieving this goal is looking highly doubtful.

New research by CoreData* shows that 53.1% don’t believe they will have sufficient retirement assets to match their desired lifestyle in retirement. In fact, with average superannuation balances at retirement of $292,500 for men and $138, 150 for women, the outlook seems very bleak.

On the upside, however, with the right planning and actions, ‘average’ need not apply to you in retirement.

In fact, there are strategies you can use to build your retirement assets substantially, and remove financial pressures when you reach retirement.

This is a key concern we help our clients with every day – ranging from those who are starting out in their career, to those who are close to retirement.

Strategies to consider include:

·       Reviewing the investment strategy that underpins your current retirement assets. This includes assessing the type and proportion of different assets you are invested in, as well as your specific underlying investments. It’s vital that these mesh well and maximise the likelihood of meeting your retirement time frame and income goals – with a level of risk you are comfortable with.

·       Evaluating whether or not a self managed super fund offers advantages to you.

·       Consolidating your superannuation accounts to avoid paying duplicate fees.

·       Salary sacrificing to move more pre-tax dollars into your superannuation fund (while reducing the tax you pay).

·       Assessing the merits of moving the assets you hold outside super into the superannuation environment, which may create tax benefits for you.

·       Making a concessional contribution (subject to contribution cap limits).

·       Making super contributions on behalf of a non-working or low income earning spouse, which may reduce your tax bill. By splitting your concessional (before-tax) contributions with your spouse, you may be able to increase the amount of super benefit that you and your spouse can receive tax-free before turning 60.

·       Accessing the government’s co-contribution payment to your super, if eligible.

Rules apply and we strongly recommend that you seek expert guidance to ensure any actions you take meet the guidelines, and align well with your particular circumstances and goals.

Aim for a retirement that’s well above average

No one wants to have to scrimp and save just to get by in retirement. But regrettably – for the average retiree – this looks like an unavoidable truth.

But this doesn’t have to be you.

Unlike the average retiree, you can seek out and take advantage of effective strategies to get ahead. And the sooner you get started, the more you’ll have to work with.

At 5 Financial, we offer a complete and integrated financial advisory service, enabling you to co-ordinate all aspects of your financial life with ease and efficiency. In doing so, you can put yourself in a better position to enjoy a retirement without money stress.

To find out more, or to book a free, no obligation consultation, please contact us.

*For more information, check out this link. Source: Professional Planner & CoreData.

Details correct at time of publication, 3.5.16.

 

2018-01-22T08:14:26+00:00 May 3rd, 2016|