3 easy steps to boost your super (40 and beyond)
Superannuation | 12/10/2016 |
3 min read
Planning for the future doesn’t have to be difficult.
Equip’s new retirement calculator can estimate how much money you may have for retirement with just a few simple details.
It can also show you how to improve your long term wealth. Adjusting your contributions, investment options, and retirement age will automatically update the projections, allowing you to plan a better future. You can try it right now by click here. In the meantime, here’s an example we ran.
John is 45 years old, he earns $80,000 annually, has $150,000 in super, and plans to work until he’s 70. According to our retirement calculator he will have a super balance of approximately $437,000 by the time he retires. That will give him an annual income of $55,000 (including age pension entitlements) until he’s 83, at which point he will have to rely on the Government age pension.
2 Small changes
According to Equip’s retirement calculator, a couple of small changes can have a big impact on John’s future balance.
1. If John can afford to salary sacrifice $50 per week towards his superannuation, the final balance when he retires will be closer to $507,000. That’s an extra $70,000.
2. If John salary sacrifices and also changes his investment options to a higher risk/return strategy this can potentially increase his retirement balance to $606,000 – that’s an extra $169,000. In this instance he can switch from the default MySuper option to a more assertive, growth driven strategy.*
Everyone’s income, financial situation, and retirement goals are different, but knowing where you’re headed allows you to make adjustments and plan for the sort of life you want to live. Here’s how you can get started.
3 Ways to get started
1. Try the retirement calculator and see how different contributions, investment strategies, and choices can impact your retirement income.
2. Talk to your employer about salary sacrificing. Your accounts department or payroll team can take care of the details, just let them know how much extra you’d like to contribute. Read more here.
3. You can check and adjust your investment option by logging into your Equip account and trying Equip MyMoney. You can read more about your options here.
*Please note that any changes to investment strategy should be done in line with your risk profile. We recommend you seek financial advice or use Equip MyMoney before implementing an investment option change. Higher return options carry higher risk.
The results from Equip’s Retirement calculator are based on the following assumptions: A moderate investment options (returning 5.5% per year), annual insurance cost of $111, wage inflation of 3.5% per year, price inflation of 2.5% per year, weekly administrative fee of $1.50 and an asset based administrative fee of 0.20% on the account balance up to retirement age (up to a maximum account balance of $450,000). Assertive option to return 6.5% per annum, assumes super guarantee contribution rate will rise to 12% in 2025.
This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the relevant Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Issued by Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383.