Will your super be enough to retire on?
How much super do you need to retire?
Some say 20 times your current annual spend .
So if you live on 10k per month, you need $2 million to retire!
A scary statistic from the Association of Superannuation Funds of Australia:-
Based on current balances and current savings, “the average retirement superannuation payout at age 60 for a male currently aged 35 to 44 would be $183,000, while for a female it would only be $93,000.”
this means that millions of Australians will not have enough money to live comfortably in their retirement.
So, if you want to retire with adequate resources, marry rich, inherit, make serious money from a successful venture
Start planning your financial future, and develop a strategy for regular saving and strategic investment .
Below are 4 simple rules to achieve financial freedom ( from the “richest man in Babylon” )(great book, by the way)
1. Spend less than you earn
2. Invest the difference wisely
3. Reinvest your investment income so you get compounding returns.
By the time you reach financial freedom, almost all your assets will have come from compounding capital growth, not from your income, your savings or your rent.
4. Keep doing steps 1 and 2 until your asset base reaches a critical mass so that you have the cash machine that gives you the income you desire.
You can now use your super as a deposit to acquire investment properties, using a self-managed superannuation fund (SMSF).
To find out how – download the attached ebook on property and self managed super .
|Should you set up an SMSF giving you control of managing your Super?|
Control – You have control over your SMSF rather than entrusting your future financial wellbeing to a complete stranger, who will take your hard-earned cash and invest it in shares and managed funds that may or may not perform.
Leverage – You can make the money in your SMSF work harder by using it as a deposit and borrowing to buy investment properties that grow in value.
Tax savings – when you retire, Capital gains is exempt from capital gains tax if you sell the investment, or income tax on any rental income should you decide to hang onto it. Before you retire, any capital gains or rental income generated by your SMSF is taxed at a rate of 15% and 10% Capital Gains Tax if you sold the property after holding on to it for over a year.
The cost! This usually involves thousands of dollars in establishment costs and sometimes there will be higher fees involved in borrowing to buy property through your SMSF. (However, when you compare it to the charges of your normal SMSF, it will probably be comparable, but transparent!
The confusion – There’s no denying that managing your own super fund can be a minefield of complicated rules and regulations.
Get something wrong and you could end up paying hefty penalties. Of course, you can pay a professional to manage it on your behalf and this is something I would strongly advise anyone with a SMSF to do – whether they’re buying real estate or not!
Enough cash in your smsf . generally at least $150k This is not a strategy for someone with a small amount of cash .
So, if you want financial independence in retirement, put some plans in place, review your finances, do something now and don’t leave it until it’s too late.
Get educated by someone who you know , like and trust!
before you go down the route of setting up your own SMSF, it is critical to seek independent advice from a properly qualified financial planner to ensure that it is appropriate for your circumstances, and that you set up things correctly and don’t fall foul of the law!
Be sure to attend Ark’s Property and Self Managed Superfund Seminar