Will your superannuation fund have enough?
Monday July 28, 2008
Your superannuation fund is not magical and requires careful thought if you are to be able to retire comfortably. The 9% contribution that your employer is required to make is very unlikely to provide you with a comfortable lifestyle if it is the only part of your retirement plans. You will need to take into account all of your major assets as well as any likely future expenses when planning whether you should contribute more to your superannuation fund.
Do you own a house or are you renting? If you own a house, you will need to take rates payments into account, but you will likely be able to live on less than someone who will be renting. A home is one of the most important retirement investments you can make, as few people will have retirement savings in their superannuation fund that allow for a lavish lifestyle if they must dedicate a large sum of money to basic living expenses.
If it is too late for you to purchase a house at this stage in your career, then putting some money you might otherwise spend on a mortgage into your superannuation fund may be a sound idea. Unfortunately, you will likely only be able to add less money, as a mortgage has the benefit of removing the cost of rent, but this may be the only way for you to improve your retirement prospects.
Please click on our sponsor ESUPERFUND banner is you are interested in starting a self managed superannuation fund to maximise your retirement savings, or browse our site to read more about using a superannuation fund.
