Recent research by ING Direct has found that people expect their superannuation to only account for the 35.8% of their retirement savings. This research also shows that Australians are looking at more options that they are familiar and comfortable with, including savings, property and inheritance money to make up the remaining bulk of their retirement income.
The below graph outlines what source of income Australians are reliant on for their retirement income based on the research ING Direct completed. Gen Y are particularly reliant on sources of retirement income other than superannuation, expecting more than 20% of their nest egg to come from their savings, 13.2% to come from property investments and 7.1% from inheritance.
This reliance of savings other than super is likely because we don’t see or hear about our super every day, so we put our faith in and focus more on what we know, see and can have more control over; property and savings.
Here at Grange Business Partners we like to help our clients with a holistic approach to reaching their wealth goals. We work closely with you to identify your financial position and to fully understand your short and long-term needs and goals. We think that it’s important to discuss our clients’ aspirations and current position in easy-to-understand terms. Wealth creation is a goal many people share and your path to financial security is unique and should be treated as such. What may be right for one client will not necessarily be right for another.
We believe it is important for you to be able to understand and know exactly where your money is going, how the money is accumulating and how you are working towards your financial goals.
Superannuation can be one of the most important wealth creation options available. However, many do not actively manage their superannuation benefits until they get closer to retirement. The superannuation system is designed to provide for you and your family from retirement. You have spent a majority (if not all) of your working life making contributions to your super fund and you should be able to reap the rewards for all your hard work throughout the years.
Take the plunge and gain control over your superannuation fund. Regularly check your statement, log onto your super website to understand your balance and investment mix, fees and performance of you superfund so you can be fully aware of what is happening with your money and take control. If you would like the performance of your fund reviewed, please contact us today.
However, we know that superannuation is not the only savings option available and may not be appropriate in all circumstances. For example, if you anticipate needing to use your savings before retirement, contributing your available funds into superannuation is not the right strategy for you because these benefits can generally only be accessed on retirement (except in very limited circumstances). In such circumstances, you should consider other investment options, such as investing through a discretionary trust – often referred to as a family trust. These trusts have a number of benefits including: –
- No limit on the contributions made to the trust
- No age limit to access funds
- Ability to distribute income amongst family members, often providing substantial tax benefits particularly if there are low income earners in the family.
- Estate planning benefits, including providing a vehicle to transfer assets between generations.
If you would like any information regarding wealth creation, please contact Grange Business Partners – we are more than happy to help!