Do I have enough money to cover my retirement?

According to the Australian Securities and Investments commission, a couple living modestly will spend $39,353 on living costs every year (they estimate this can be up to $60,264 per year for a couple living comfortably). This means, if you retire at 65 and live until you are 85, you would need $787,060 to cover your living costs. This estimate is based on a few factors and the calculation assumes you own your own home.

It is drilled into us by the financial sector that you have to put in the groundwork for your super in your early life to enjoy a prosperous retirement. But what if you didn’t? What if your super isn’t going to cover your estimated living costs? Well, don’t panic.

As the Chinese proverb says “the best time to plant a tree was 20 years ago, but the second best time is now”. These tips can help you top up your super and live the retirement dream — without worrying about your finances.

Downsizing for an extra super contribution

In July last year, the Australian government introduced new laws to allow people over the age of 65 to add the proceeds of selling their home to their super funds. There are a few rules that come along with it: you have to have been living in the property for over ten years as your primary place of residence, the residence must be in Australia, you must add it to your super within 90 days of selling your home, you can only do this for one property, you can’t contribute more than you sold your property for, and you can contribute a maximum of $300,000 per person. There are more rules, and you should check you are eligible before selling your home.  

Pocketing the extra from bills and maintenance

If you do choose to downsize you should see a noticeable drop in your monthly outgoings. From cheaper utility bills to a huge decrease in maintenance costs. This is especially relevant if you choose to purchase a new home as more modern properties use energy efficient building materials and brand-new appliances. Put the extra money you are saving into your super each month — after all, every little helps!

Change super funds to get a better deal

Have you compared your super to other products on the market lately? New supers are coming out all the time, and you could be paying too much in fees and charges. Changing to a better super fund for your specific super could save you hundreds of dollars a year.

Decluttering for some extra cash

Moving house is a great excuse for a clear out. Have you got antiques, valuable furniture, or artwork that won’t fit into your new home? Contact a local auction house to see how much you could get for it. Even if your furniture isn’t valuable selling it on Gumtree or Facebook Marketplace could drum up some extra cash to add to your super and make sure you have enough in there to enjoy your retirement when the time comes.

Written: 7 March 2019

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