If you think just relying on your employer superannuation contributions alone will prepare you adequately for a comfortable existence after work – think again! Research shows that being proactive and getting the right financial advice is a crucial factor in separating those who will have choice and financial security in retirement versus those who won’t.
Club Plus Super, an award winning super fund with over 90,000 members, is witnessing a number of fund members achieving millionaire status through their superannuation savings and believes that others can benefit by taking note of the strategies these people applied to get there.
“The fund reviewed this group of super millionaires and noticed three common tactics used to grow their superannuation,” said Paul Cahill, CEO of Club Plus Super.
“Firstly, every single one of the millionaires contributed additional funds to their superannuation which helped ensure that they maximised the tax advantages from their long-term savings.
“Secondly, they also actively engaged with the fund by reviewing their investment and contributions strategy on a regular basis,” said Paul Cahill.
“Lastly, these members were proactive in seeking financial advice to establish strategies aligned with their long-term savings goals.
“If all Australians employ these tactics with their own superannuation it may have a profound effect on the amount of money they have in retirement,” said Paul Cahill.
The Australian Bureau of Statistics found that in early 2009 there were around 60,000 males and 30,000 females who had more than $1 million in superannuation.
The Association of Superannuation Funds of Australia (ASFA) additionally estimates that in order to fund a comfortable lifestyle in retirement, a couple would need around $510,000 in superannuation and other income-producing assets.
This amount assumes that the couple’s expenditure would be partly funded by the Age Pension.
The reality is that many Australians will not reach this figure without making additional contributions to their superannuation fund and ensuring they have the right strategy in place.
The good news is that Australians are living longer, but that also means savings will have to stretch even further in future years.
“While building a significant nest egg is the first part of the equation, the second part is to ensure that you choose the right products, such as income streams to make it last for the duration of your life,” said Paul Cahill.
“Too many people use their superannuation too quickly without taking into account some of the unforseen and added costs that could arise during retirement, which may compromise the quality of lifestyle you want to enjoy throughout retirement.
“While the common strategy across the super millionaires seems to be ‘proactivity’, it could be argued that proactivity is only useful when paired or complemented with quality service levels from the fund in question,” said Paul Cahill.
“Members should select a fund that provides good advice and ongoing support not only during the accumulative years, but also during retirement.
“By following some of these simple tips and recognising that superannuation is a unique savings vehicle, many Australians could add significant wealth to their superannuation savings or even join the growing club of super millionaires,” said Paul Cahill.
Club Plus Super recently received the “Outstanding Value” award from CANSTAR and was given five out of five stars in three out of four categories.
If you’ve been procrastinating for too long and it’s time to take action to get yourself comfortably set up, call Empire on 9323 3000 or email us at efg@efg.net.au
Article by Cut+Paste | January 7, 2015
