The Association of Superannuation Funds of Australia each year publishes an ongoing report into the amount of money required to enjoy a retirement in Australia.
The September 2011 report has been updated to indicate that the cost of a "Comfortable lifestyle" is now $54,954 for a couple while a "Modest lifestyle" is $31,519 per year. It is interesting to note that ASFA advise that the Comfortable lifestyle enables a retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of things such as: private health insurance, a reasonable car, good clothes, domestic and occasionally international holidays.
The other concerning factor in the lifestyle report is that someone on $100,000 income relying on their 9% superannuation contributions should be able to accumulate around $366,000 over 30 years, but will actually need $510,000. he question is therefore, "How do you make up the gap?"
Bottom line is that 9% superannuation is not sufficient, clearly, and if you are in a Self Managed Super Fund, you probably know that. The other important point is that you, no-one else, MUST keep your eye on the return that your super fund is achieving year on year. The above calculations rely on at least a 7% return annually. In our current volatile times, make sure you get the best advice and prepare a solid asset allocation strategy for your fund. Then stick to it. Get some good investment advice and review it annually.
