Aussie confidence in super to retire teeters
A new Finder survey of over 1,000 Australians has found only 39 per cent were somewhat confident that their superannuation would be enough to “get by in retirement”.
Just under 30 per cent of respondents were uncertain if they would have enough super to live comfortably in retirement, while 23 per cent believe they won’t have enough to do so between their super and investments.
Only 17 per cent of those polled felt confident that their super balance was enough to retire comfortably, while 22 per cent agreed but with some spending cutbacks.
A further 11 per cent said other investments would provide them with the safety blanket in retirement that super cannot.
“Superannuation is something many Australians, including the younger demographic, don’t engage in enough,” Sarah Megginson, money expert at Finder, said.
“It can be a sad case of ‘too little too late’ for many who realise that by the time they reach retirement age, their super balance will fall well short of the amount of money they will need.
“The Age Pension is asset-tested in Australia so you may not qualify. “It’s essential to know how much you have in super and to consolidate your funds. You pay fees for each fund you have – it’s like having your savings split across 3 savings accounts and paying account keeping fees on all of them.
“It makes so much sense to bring it all together and spend less on fees, so more money stays in your name, working towards building your wealth.”
According to Finder’s survey, more women said they won’t have enough super or other investments to retire, compared to only 18 per cent of men.
Megginson recommended those who are able should consider making personal contributions to their super balances, particularly through a salary sacrifice plan.
“Any income earned within your super is capped at a maximum tax rate of 15% per annum. If you currently pay say 32.5% tax, you’re ahead immediately,” she said.
“For instance, if you salary sacrifice $1,000 over 12 months, you’d pay $150 on that income and $850 will go to super where it will be invested for your future. Otherwise, you’ll pay $325 tax on that money and have $675 in your bank account.
“Obviously once you put the money into super you can’t get it back out so start small – but even $100 a month would make a difference thanks to compounding interest.”