Personal and Self Managed Superannuation

Superannuation is a means of saving for your retirement with the added bonus of tax concessions. It is not an asset class like shares or property but rather a vehicle offering tax breaks when you invest in these assets. If you organise your superannuation properly, you should be able to enjoy life after you stop working.

In times gone by, people could expect to live only a handful of years after they retired and their bank savings supplemented by the pension were probably sufficient to see them through.

But with people now living 20 or 30 years in retirement, there is a greater need to ensure sufficient funds are available to last for the long haul. Statistics show that if you take a couple aged 65, one of them has a one-in-three chance of reaching 100.

That's a lot of years to provide for.

How much do I need?

According to government estimates, you need to save 12 per cent of your annual income for the 40 years of your working life to give yourself an income equal to 40 per cent of your pre-retirement salary. And most of us want at least 60 per cent. So if you earn $50,000 now, a starting point might be to think of a retirement income of about $30,000 a year.

Without tax breaks and compulsory contributions from employers, few would have enough retirement income to ensure an adequate lifestyle. While you usually don't spend as much in retirement (no commuting, no office clothes, no school fees, probably no mortgage) you still want money in order to enjoy all those extra hours you have on your hands.

Going out for dinner, enjoying the theatre, joining clubs and travel may constitute your retirement lifestyle.

But these things cost money.

If you fail to save enough for your retirement, there will always be a government pension, but that may not deliver the life you want to lead.

For further information please contact Amazon Financial Group Pty Ltd.