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3 rules for a million dollar retirement

Superannuation  |  8/02/2019  |   8 min read

The Financial Review recently published an article outlining the things you can do in your 20s, 30s and 40s to retire with $1 million dollars. If you’re looking for a quick summary, it comes down to a couple of key points;

  • Spending less than you earn
  • Investing the difference in the future

That’s not particularly original or helpful advice, so we decided to look at the three things that will help you enjoy a better retirement. You might not end up with a $1 million, but what follows is a practical roadmap for all Australians who’d like a better retirement, and more money to enjoy it.

A family home is still your most important asset

A family home has long been the Australian dream, and for good reason. It offers a bricks and mortar framework on which to build your future wealth.

Despite the recent slow down in the housing market, the past decade has seen significant prices increases throughout much of Australian. For people who have held their property for a number of years this has created additional capital. And if you’re approaching retirement there are a number of ways you can tap into the increased value of your home, including the 'downsizer contribution' scheme. This allows you to downsize the family home, contribute some of the proceeds into your super, and buy a new property in a tax effective way. You can read more about that here.

If you’re trying to get on the property ladder and despairing at the cost of real estate, there are options available.

  • Buying an investment property in a more affordable area (while you continue to rent) allows you to get in the market, and means you can still live in your preferred suburb.
  • Looking at more remote areas and taking advantage of regional train lines. Homes are often a fraction of the price you’ll find in the city, and regional train lines can often get you into the CBD in the same amount of time as peak hour traffic. 

Point being, if you’re entering retirement with a mortgage free home you can expect a far more comfortable lifestyle than people who have to rely on renting.


Superannuation is designed to fund your retirement. By putting 9.5% of your salary aside, and relying on compounding interest, you should have enough money to enjoy a comfortable, self-funded retirement.

The chart below shows you how your money can grow with compound interest.


Growth of $50,000 invested in the Balanced Growth option, as at 31 December 2018. Past performance is no guarantee for future results. Annualised returns for Balanced Growth are 7.60% (15 years), 8.31% (10 years), and 9.48% (7 years). Compound interest calculated with ASIC’s MoneySmart compound interest calculator. 

The way you manage your superannuation can have a real impact on your final balance. The first step is finding a super fund with low fees and a history of solid returns. Equip has consistently been rated one of the Top Ten funds in Australia for returns, so if you’re already a member that’s a great start.

What else can you do?

  • Check your investment options – Switching to more growth driven investments can potentially increase your returns.  
  • Contribute more – Salary sacrificing and other contributions can help you grow your balance and benefits from compounding interest
  • Think long term – Markets go up and down in the short term, so it’s important to think of your investment returns over the long term.

Outside investments

If you’re making progress with your mortgage, have your superannuation on track and have some disposable income on hand, an investment strategy can help you build long term wealth. It also means you’re not tempted to squander the money on quickly forgotten purchases.

If you’re new to investing, and don’t know your FTSE100 from your Nikkei 225, there are a number of cheap and cheerful ways to get into the market. And the easiest is an index fund. In plain English, an index fund buys you a small piece of every listed stock in a given market. For instance, investing in the S&P/ASX 200 index would mean you’re buying a small piece of every stock trading in the major Australian market.

This provides diversity and keeps costs low. So it’s perfect for people who are just starting out with investments. But you’ll find both seasoned pros and greenhorns investing in index funds for the same reasons.

There are various online services and apps that allow you to invest in the stock market (including index funds). These may be linked to a bank, or they may be independent, but a quick online search will point you in the right direction.

3 is the magic number.

A comfortable retirement means different things to different people. And while you don’t necessarily need a home, a large super balance and an investment portfolio to enjoy your retirement, it’s important to plan ahead and think about the sort of retirement you’d like to achieve.

An Equip financial planner can help you plan a better retirement. For more details please click here.


Equipsuper Pty Ltd (“Equip”) (ABN 64 006 964 049, AFSL 246383) is the Trustee of the Equipsuper Superannuation Fund (“the Fund”) (ABN 33 813 823 017, MySuper Authorisation 33813823017672). This document provides general information only. It does not take into account your personal objectives, financial situation or needs, so should not be taken as personal advice. Before making a decision to invest in the Fund, you should read the appropriate Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Equip is licensed to provide intrafund personal and general superannuation advice under its AFSL. Member Advisors are employees of Equip. For more information about the remuneration of Equip and its employees, please refer to the Equipsuper Financial Services Guide (FSG).

Equipsuper Financial Planning Pty Ltd (“EFP”) (ABN 84 124 491 078, AFSL 455010) is licensed to provide financial planning services to retail and wholesale clients. EFP is owned by Equipsuper Financial Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the EFP Financial Services Guide and/or Privacy Statement by contacting our Helpline 1800 682 626.

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