Don’t wait until you are 80+?

Super Equity was established with the purpose of helping people achieve their goals in retirement. Goals that many don’t even think about when they are in their 20s and 30s.

But these are the years you need to be planning for retirement.

It’s a hard reality to swallow for some. But did you know, if you gave up a cup of coffee every day in your 20s and put it into savings for your retirement, it could total the cost of a new car in retirement?

Many workers in their 20s and 30s, like a client I recently began working with say, “it’s hard to prioritise superannuation over every day costs like rent… and holidays.” This is not uncommon.

It’s worrying, because let’s face it, the Australian population is living longer. Between now and 2050 the number of older people (65 to 84 years) is expected to more than double. Very old people (85 and over) is expected to more than quadruple, from 0.4 million people today to 1.8 million in 2050.

In contrast, the number of children is expected to increase by 45 per cent; prime-age working people is expected to increase by 44 per cent. This means that, the proportion of people aged 65 years or over is projected to increase from 13 per cent in 2017 to 23 per cent by June 2050. At the same time the proportion of working-age people in the total population is expected to fall by 7 per cent to 60 per cent. As a consequence, there will be relatively fewer people of working age to support an increasing number of older Australians.

What does this mean? Population ageing will intensely increase pressure on health care, age-related pensions and aged care.

My new client, who had eight different funds (also not uncommon) and was paying multiple fees on each fund before coming to Super Equity, said, “It’s easy to ignore it all. To push it out of your mind. It’s easy to say, ‘save more money,’ but when you can’t even buy a house now, why would I want to save for something in 40 years’ time?”

This is a popular attitude. The reality is, that the right superannuation strategies implemented now, can greatly improve your chances of being able to retire, when you hit what we now refer to as ‘retirement age’.

In their book The 100-Year Life, Linda Gratton and Andrew Scott consider the implications of longevity on retirement scenarios for different generations. Their modelling demonstrates the post-war generation could achieve a reasonable retirement income with affordable savings during their working lives, supplemented by corporate and government pensions.

However, someone born in 1971 with a life expectancy of 85 and retiring at 65 would need to save about 17 per cent per annum to retire on half their final salary, assuming they get a modest aged pension from the government. Quite confronting considering Australia’s compulsory super rate is 9.5 per cent per annum and the Inter-Generational Report predicts someone born in the early ’70s will live closer to 90.

For the younger generations the current system becomes unworkable. In Gratton and Scott’s modelling, a person born in 1998 with a life expectancy of 100 and retiring at 65 would need to save 35 per cent of their working income to retire on half their final income. At 9.5 per cent annual contributions, a young person will need to delay retirement to at least their 80s to retire on half their final salary. Still assuming a modest aged pension… which is not guaranteed.

You need to ask yourself if you’re willing to work until you are 80 or older. Are you?

This is all summed up nicely in the words of my new client:

“I had to do something. When I sat down with Tracy and talked about what we think retirement is and the reality of what it will be, I realised that I had to get my act together now. And I’m so happy that Super Equity is putting strategies in place for me to be well-positioned. I am doing something about it all rather than just sitting by and hoping I get rich.”

Contact us today  – because we’re not willing to work until we’re 80, and are guessing you’re not either.

General Advice Warning
The information provided in this post is general information only. Unless otherwise stated the information is not designed for the purpose of providing personal, financial or investment advice. Any examples are presented for illustration purposes and past performance is not a reliable indicator of future performance. The information provided does not take into account your particular investment objectives, financial situation or investment needs.

Without limiting the generality of the above paragraph no person, persons or organisation should invest monies or take action on the reliance of the material contained in this post, but instead should satisfy themselves independently (whether by expert advice or otherwise) of the appropriateness of any such action. Unless otherwise stated the information presented is not a recommendation to invest in any investments, securities or financial products.

This service, like all other financial services, is subject to market forces and unpredictable events that may adversely affect its future performance. Whilst all care has been taken in compiling information in this post, and is provided in good faith, it is not to be relied upon as a substitute for professional advice. The views expressed are commentary only and the writer accepts no responsibility for the accuracy, completeness or timeliness of the information.

Super Equity Pty Ltd ACN 609 373 202 is a Corporate Authorised Representative 001238425 of ANDIKA Pty Ltd AFSL 297069. It should also be noted that references and hyperlinks to any third party information (including, but not limited to: news articles, blogs, reports, videos or other mediums of information) is not an endorsement of that party or product.

Stephen Hall
Stephen Hall
September 21, 2023.
Tracy & Adrian's knowledge/experience with financial markets, greater global & domestic political/economic impacts & individual companies/stocks is not just unique & refreshing, but also gives great peace of mind. Having a team this capable taking care of your hard earned to help avoid knowable negative impacts, and/or take advantage of opportunities well ahead of time is like nothing I've experienced before. Could not recommend highly enough. Subscribe to Adrian's newsletter too if you want a no B.S. commentary that is unlike the sanitised drivel coming from mainstream financial reporting.
jeff allott
jeff allott
June 22, 2023.
Sound knowledgeable and friendly service with advise tailored to my requirements
Natalie Gaby
Natalie Gaby
January 12, 2023.
I highly recommend Super Equity to anyone needing assistance or guidance with their Super. Tracy was very thorough and clearly explained how Super works and why she made particular recommendations for us. Her (and the team's) customer service is outstanding with being very personalised, and we look forward to a long working relationship with them.
Charlie Gimblett
Charlie Gimblett
August 8, 2022.
A huge thanks To Tracy And Adrian from Super Equity for sharing their knowledge on the recent Introduction To The Stock market Course I attended. The course was fabulous and gave a great insight on how the world operates from Share Markets, to Economic Cycles, World Currencies and great tips on how to look for opportunities on how and where to invest based on local news and world events along with overseas markets and indicators. Also thanks again Adrian for the Silver coin for 1st prize as part of the demo share market game we played over the duration of the course. Would thoroughly recommend the Stock Market course as well Tracy and Adrian's knowledge on our own investments. Cheers Charlie
Leigh P
Leigh P
April 29, 2022.
Tracy has been a pleasure to deal with. Found her very approachable and patient. She is very knowledgeable in super funds and I would highly recommend her to anyone who needs more education on how to make their super work for them.
Lena Diez
Lena Diez
February 25, 2022.
My husband and I have had the privilege of receiving the guidance, services and support from Tracy for over 5 years. Having joined Super Equity has been one of the best financial decisions we have made to date. Tracy's extensive experience and knowledge has guided and helped us improve in our financial journey. No question is to silly, Tracy is always available for any query you have and gives us the time to explain our portfolio and investments. Receiving the daily morning reports has been helpful to understand and learn the market. We have always highly recommended and will not hesitate to recommend Tracy and team for any and all financial guidance. Thank you Tracy and look forward to your continual support.
Tessa Daal
Tessa Daal
October 13, 2016.
Tracy has been an amazing teacher. I have gone from having no idea about what my super was doing and feeling really overwhelmed by the thought of all that it involved, to now being in control and understanding. Through super equity's I have a transparent, easy to understand managed fund. Tracy has even put me into contact with advisors specialised in life insurance and income protection. I cannot thank Tracy enough for empowering me and helping me organise all my affairs. If you need someone patient an knowledgeable to organise your super and investment portfolio, Tracy is the best!!
Dianne Bentley
Dianne Bentley
July 8, 2016.
The service and support received from Super Equity has reached and surpassed all our expectations. Having previous experience with stock brokering firms over an 11 year period has highlighted to me how superior the service and support received from Tracy Askew at Super Equity is. For myself and for my clients. Tracy's in depth fundamental and technical knowledge in all areas of the market reduces many hours of my time in the research needed to be successful and profitable for myself and my clients.