Look, I’m not your dad or anything, but we gotta talk about your super, particularly, how you’re currently traveling with it.
I know, the topic can be as dry as an old felafel, but even small amounts of money now can make a huge difference in the future, that’s the beauty of compounding interest, a concept so great that Albert Einstein named it the eighth wonder of the world.
But why is it so important? Well, lets look at some figures.
The Association of Superannuation Funds Australia says that you should have a balance of $545,000 by retirement to live comfortably. That’s annual living costs of $58,784.
To use a case study by senior financial advisor Cara Brett:
A 25-year-old starts their working life earning $45,000 that’s assumed to increase by 3 per cent each year. They take no time off to travel or have children and only make the standard contributions to their fund.
Here’s what they’d have:
This will give you $42,254 a year from retirement to the age of 79, which isn’t horrible, but it’s a little short of that comfortable 58 large that ASFA reckons you need.
JP Morgan have taken it even further, releasing the figures on what you should have in your Superannuation based on your age and income.
This is why it’s important. Now I’m not going to tell you that you need to start pumping cash into your fund, that’s up to you to decide. What I would suggest however, is that you’re simply aware of how you’re tracking and whether you’re comfortable with what the end result will be.
If you’re not, it’s time to start thinking about how you’re going to improve it, but if you are happy with it, keep on keeping on, friend!
Want to add a cool mil to your super before you retire? Suss this article.