Super in focus
Contributing members’ future needs
guide super choices
When thinking about your life in retirement, remember that according to the Australian Institute of Health and Welfare, the average life expectancy for Australian men is now 79 years, and 84 years for women. That means if you retire at 55 your super might need to last you more than 25 years.
What kind of lifestyle do you want to enjoy in your life after work, and what will it take to get there? We all want to feel financially secure, but this can mean different things to different people depending on your goals and expectations. The key to reaching your personal goals is to be prepared, and the sooner you start planning for the future, the better off you’re likely to be.
How much money do you think you’ll need?
Most of us have thought about when we’d like to stop working, but we haven’t thought as hard about how much money we’re going to need to enjoy life after work. The answer won’t be the same for everyone, but research into retirement living standards by ASFA and Westpac might help get you thinking about how much you’ll need. Visit www.superannuation.asn.au for more information.
Here are some useful questions that you should also ask yourself:
- When do I want to retire?
- If I retire then, how long will my savings need to last?
- Will I still have debts to cover?
- What sort of lifestyle do I want and how much will this cost?
- Where do I want to live once I leave the workforce?
Once you’ve answered these questions, you can try doing a budget to see how much the lifestyle you want will cost. The template at www.understandingmoney.gov.au is a great place to start.
How much money are you likely to have?
Working out how much money you’re likely to have for your retirement is just as important as thinking about how much you’ll need.
The PSS i-Estimator in Member services online can help you estimate your final benefit. You should also consider any other income which might supplement your superannuation, such as that from investments and property.
How can you supplement your savings?
If there’s a big difference between the lifestyle you want and the one you think you’ll be able to afford, don’t panic. There are plenty of things you can do to help bridge the gap between now and when you retire. You might consider:
- increasing your rate of contribution – visit the Contributions section of our website to find out more
- claiming your super in a different way – www.fido.gov.au has some useful information on this
- examining the tax and social security implications of different super choices – Centrelink’s planning for retirement service at www.centrelink.gov.au has useful information on payments, services and programs relating to life after work.
