Boosting your superannuation balance


By AMP financial planner Dianne Charman*

When it comes to weighing up superannuation balances between the genders, the unfortunate truth is that the scales are tipped well in favour of men. The average super balance for Australian men is $62,900 compared to just $35,200 for women **.

The gap in savings is due to a number of things, including women typically taking time off work to raise a family and the average income for women also continues to be less than for men. Women are also more likely to work part-time or casually and divorce can leave some women without a retirement nest egg if their partner retains the super when assets are split.

With women on average living longer than men, there are many women in Australia today struggling to survive on limited savings.

But that’s enough doom and gloom. The good news is there are things you can do to ensure your superannuation is in tip top shape. By following these few simple rescue remedies, you can boost your super balance and look forward to a stress-free and comfortable retirement: 

Have a solid plan in place. Whether you’re single or in a relationship, it’s important to have a sound strategy for building your super assets between now and your retirement.

How much is enough? To live a comfortable life in retirement you’ll need roughly 65% per cent of your pre-retirement income. In dollar figures, you’ll need at least $40,000 in super a year on average to retire comfortably, and for a couple $55,000. But the amount of income you’ll need really will depend on your lifestyle – do you plan to take a trip around the world when you retire or are you dreaming of spending long days pottering in the garden?

Prepare a budget for retirement. Once you’ve thought about what you want your retirement to look like, you’ll be better placed to work out exactly how much income you will need to pay for this lifestyle. Make sure you accurately account for all your living expenses and budget for additional costs such as buying a new car or travel.

Consider spouse super contributions. If you have a lower income than your partner (including a de-facto), your partner can help build up your super by contributing on your behalf. This can be a tax-effective strategy to help boost your joint retirement income. Your partner can make contributions to your superannuation and depending on your income and how much is contributed, can potentially receive a tax offset of up to $540.

Start ploughing more money into super. For pre-retirees, now is the time for aggressive retirement planning. As a large chunk of your home loan will hopefully be paid off by now, you may be able to salary sacrifice  a significant portion of your of your wage into your super. And even if retirement is still a while off, if you’re a reasonable salary earner, it still might be a good idea to top up your employer’s 9,5 per cent Super Guarantee by salary sacrificing. Whether you can do this tax-effectively or not, depends on how much concessional contribution cap you have left after taking Superannuation Guarantee contributions into account.

Consider ‘transition to retirement’. If you’re 56 or over and still working, you can start boosting your nest egg with a transition to retirement plan. This involves moving super into an account-based pension for a more tax efficient income. By using the pension to cover living expenses, you can then start injecting your salary back into super. Keep in mind there are concessional caps limiting the amount that can be salary sacrificed into super. Some changes to this strategy are coming in on 1 July 2017, which may make it less attractive for some people.

It’s time for you to stop and ask yourself if your current retirement planning is setting you up for the type of life you want to lead in retirement?  A professional financial planner can help you put strategies in place to help you grow your nest egg before retirement.

And remember, it is never too late to have an impact on your superannuation savings.

*Dianne Charman is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.

Any advice given is general only and has not taken into account your objectives, financial situation or needs.  Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.


**Source: These are the latest findings from the Roy Morgan Single Source survey of over 50,000 people pa, of which over 34,000 have superannuation. July 2014-June 2015.


Dianne Charman

Dianne Charman is mother, accomplished business woman and Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.


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