Property Investment: How it can help boost your superannuation account

July 19, 2013 3:30 pm
posted by James Parnwell

superannuation account

Do you have 1.2 million dollars in savings?


Do you think you could in 20 years?


Assuming that in 20 years you are looking at retiring, 1.2 million dollars is what you and your partner would need in order to maintain a comfortable retirement.

This figure scares 80% of the Australian population who aren’t making personal after-tax contributions to their superannuation account.


A comfortable retirement will require 65% of your annual salary per year. In Australia, at the moment, employers are expected to pay a minimum of 9% of your wage into your superannuation account. So the rest of the money has to be contributed by you.


These statistics are a scary thought for the future of currently employed Australians. Not only have generations before us known the value of hard-earned cash, they also knew how to save savvier and plan for their future.


Somewhere amongst the technology and gadgets that have promoted us living in the ‘now’ we have forgotten the art of a good budget and a good plan!


Between the new cars, luxury dinners and expensive mortgages, the harsh reality is most Australians don’t see themselves being financially sufficient enough to retire before they’re 70. Worse still, 15% of workers over 45 think they’ll have to just work until they die.


A report by the Association of Superannuation Funds of Australia (2007) said; “On the basis of the current average superannuation balance and average income of those aged 35 to 44 and the assumption of only compulsory superannuation contributions being made, 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.”


So that’s saying, an average 35-44 year old couple would be $750,000 short when they retire.

So how do we fill that Superannuation Account gap?


One of the main reasons people don’t contribute extra into their superannuation account is that they just don’t include it in their weekly budget.


Many Australians simply live week-to-week and saving for the near future, let alone the distant future is not thought about, or simply not an option.


Sit down with your partner and discuss where you may be able to cut back in order to save to grow your income. Remember, while putting a little extra into your superannuation account each week will be helpful, there may be other ways to see your finances grow better.


Look at investing in property as soon as you can. There are many affordable ways to invest in property. The second mortgage could cost you as little as $100 a week with the promise of a return that will cover that $750,000 when you retire.


Property prices are currently rising steadily between 3-6% per annum while mortgage interest remains low. With tenants, there is a good chance that your mortgage repayments will be covered by rent so your investment will be sitting pretty at an address waiting to be cashed in at possibly 120% it’s bought value come your retirement.


Article by Jordan Cox and James Parnwell




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