Research shows that 40 per cent of young Australians don’t know how much money they have in their super, while 16 percent only have a vague idea.
Retirement can seem a long way off for young Australians, which is why it’s understandable that many feel they can delay planning for their golden years.
Figures from the Association of Superannuation Funds of Australia (ASFA) showed that 40 per cent of young people in the country don’t know how much money they hold in their super account. A further 16 per cent only have a vague idea.
We’re going to try and dispel some of the misconceptions that young people may have about their super, as it’s never too early to start saving for retirement.
ASFA claimed that 60 per cent of young people suffer from ‘consolidation lethargy’.
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1. You’re probably underestimating your needs
ASFA said that young people expect they will need approximately $625,000 to retire comfortably, while over-60s feel a nest egg of nearly $1 million is more appropriate. So who’s right?
SuperGuide estimates that couples who invest conservatively require at least $720,000 to live a comfortable lifestyle, whereas single retirees can get by on $650,000. Both figures are higher than young people are currently accounting for.
How much super could you have and how long will it last. Calculate here with our Super Simulator.
2. You may have more than one super account
Nearly one-third of 18 to 25-year-olds have more than one superannuation account and 10 percent have three or more, according to ASFA. By the time people are aged between 26 and 30, nearly one-fifth have more than two funds.
This may not seem an important issue, but you are likely paying additional administration fees for every open account you hold if you have more than one. You are probably also paying multiple, unnecessary premiums on insurance cover.
3. You can consolidate your super accounts
The longer you leave multiple accounts open, the more money you’ll pay in fees, which will have a cumulative effect on your savings over time. ASFA claimed that 60 percent of young people suffer from ‘consolidation lethargy’ and 30 percent struggle to find old accounts.
However, you should be able to access all the information you need via myGov, and the service is also able to consolidate your accounts.
4. You can supercharge your super by saving early
The nature of compound interest means that saving extra towards your super at a young age can considerably increase your retirement pot.
Superannuation Guarantee payments are currently 9.5 percent of your earnings, but you can begin making voluntary contributions to give your super an added boost.
If you would like to discuss the right retirement plan for your specific circumstances and objective, talk to one of our advisers.
What you need to know
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