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The majority of Australians will outlive their super

More than three quarters of Australians won’t have enough superannuation to last them throughout their retirement, a new report from financial services group Deloitte warns.

The report also finds that the increase in compulsory superannuation contributions to 12 per cent – legislation for which was introduced into federal recently – won’t benefit retirees until well after 2030.

In their report Dynamics of the Australian Superannuation System: the next years 2011-2030, Deloitte finds Australia’s superannuation industry will grow in value to more than $6 trillion by 2030, but the average Australian just won’t have enough to comfortably live in retirement.

The estimated super balance for a single male to live a modest lifestyle in retirement is $280,000, according the Association of Superannuation Funds of Australia. However as far as I’m concerned that would only give you a very modest lifestyle.

Deloitte Actuaries and Consultants partner Stephen Huppert said the average retirement balance for a single male in 2030 would be only $217,000, meaning he had a 78 per cent chance of living longer than his super could support.

Clearly more Australians will be relying on the age pension in the future, but what sort of a life will that give you?

So what can you do?
The conclusion is inescapable – you have to look after your own financial future.

That’s why it’s so important to build your own property investment business – one property at a time.

Of course super will play an increasing role for most of us so maybe you should take control of your super by running a self-managed super fund (SMSF). It would be hard to do worse than the majority of corporate super funds. And if appropriate you could consider buying a property in your SMSF now that the rules for borrowing in super have changed.



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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