It’s often said the biggest issues in life are dying too soon or living too long. Obviously none of us want to shuffle off early, but at the other end of the scale, just how enjoyable is life going to be if you grow old without the financial resources to live comfortably?
According to news.com.au, more than 80% of us won’t be retiring comfortably and Gen X Aussies (those born in the 1960’s and 1970’s) will need to save up to a staggering $4 million to enjoy their golden years.
A healthy stash of super will be absolutely critical in years to come because it’s unlikely the Government will be able to sustain the current old age pension and concessions available to our seniors.
So what should you be doing to ensure you can enjoy your retirement when the time comes? Here are our top 4 tips to boost your super contributions that could well mean the difference between living comfortably or just getting by.
It’s worth taking the time to chat to a financial planner. They can help you determine the risk profile that best suits your personal situation and they understand the performance of the various funds. All funds will vary over time, but some perform well more regularly than others, so putting your money into a fund that’s consistently in the top tier makes good financial sense.
Your advisor will also let you know what insurance benefits are provided by the various funds and what level of fees will be charged.
If you’ve switched jobs a few times over the years, chances are you have super sitting in multiple accounts. This isn’t a good strategy because you’ll be paying fees to each fund, and they’ll all be nibbling away at your money. The best course of action is to put all of your eggs in one basket and consolidate. And if you’re not sure if you have super tucked away in another fund somewhere, it’s easy to find your lost super by registering for ATO online services via myGov.
Contribute a bit more to your fund
Putting a little extra away each week into your super makes sound financial sense and it really ads up. If you can spare $20 per week to send to your super fund over 30 years, it could give you an additional $90,000 to play with when you retire. The actual amount obviously depends on where the money is invested and how your fund performs over time, but you’ll still end up with a lot of money and you probably won’t even miss that $20!
If you can afford it, a lump sum contribution is a really good way to bolster your super and you’ll also benefit from paying just 15% tax instead of your marginal rate (as long as your total super contributions for the year are $25,000 or less). This is a really good tactic for anyone who is self employed.
Get some free money from the Government
Yes it is possible to get some free money from the Government! If you earn less than $37,000 per annum, you may be eligible to receive a $500 low-income super tax offset refund, paid directly into your super fund.
Additionally, if you earn less than $51,813 a year (for the 2017/18 tax year) and make an after-tax contribution to your super fund, you could be eligible for another $500 courtesy of Malcolm Turnbull.
You can receive a tax-free super contribution from the federal government when you make a non-concessional (after-tax) contribution to your super account, subject to you satisfying a work test, an income test and an age test. Find out more about it here.
A final word
Adding a little bit extra to your super today can make the world of difference to the quality of your tomorrow. But if you’re more focused on your quality of today and find yourself short on cash, we've got you covered. Take a look at our mini-loans from $1K - $5K to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually deposited into your bank account within a few hours!