Why should you care?
Why should you care?
- May 30, 2018
- Posted by: Daniel McGregor
“Why should I care about money for the future? Super is compulsory, and the Age Pension will be there when I retire, so I should be fine.”
I often get questions (or statements) like this, around why people should take long-term financial planning seriously. And the reasoning is pretty simple, but not widely known.
Most of us are in paid jobs which provide us with a fortnightly pay cheque and that money affords us a lifestyle we often enjoy… we have a roof over our heads, can pay the bills, give the kids most of the things they want, take a decent holiday now and then and hopefully save a little here and there. So, we feel comfortable.
We also have compulsory superannuation, which sees 9.5% of our pay go to a super fund every fortnight. This is where the problem starts… if, when we retire, we want to enjoy the same lifestyle we do now, then we would need be putting away around 15% of our income every year. Every year we don’t do that, we slip further and further away from being able to retire the way we would like.
As for the Age Pension… well, it was introduced in 1904 and set at age 65 for men. The average life expectancy at the time was only 55. These days, the Age Pension age has been increased to 67 while our life expectancy is around 30 years longer than it was back in 1904. Currently, someone on the full Age Pension would receive a little over $23,500 a year, while a couple on the full Age Pension gets paid just over $35,500. Think about how much you earn now and how that compares with the Age Pension. You can probably see why most pensioners are living in virtual poverty and I can guarantee you the government isn’t going to suddenly increase the Age Pension!
Here’s the truth of it… the system (that is, the super system and the Age Pension system) has been designed to ensure that you get rewarded for putting more money away for your own retirement. Don’t make the mistake of thinking your 9.5% super contributions and the Age Pension are going to pay for a nice lifestyle in retirement.
There are numerous ways you can get your money working harder for you. So, if you’re not sure if you’re super fees are high, if your super is invested well or if you need to be putting away a little more for the future, then get in touch and let’s have a look at it together, because I’ll take your financial future seriously. Where your super is invested is one of the most important decisions you’ll ever make, it’s your money and it’s worth paying attention to it. If you care about money now, you’ll be rewarded many years from now with a financial future you want, not one you have to endure.