Focusing on retirement means saving up for it. The way we do that in Australia is through our superannuation.
Superannuation is a tax effective way to save for your retirement that you typically can’t access until you retire.
Your employer will contribute 9.5% of your salary into a chosen super fund.
The way super funds work is that you all give your money into a pool and then the super fund has professional investors that take that money and invest it into a whole lot of different products on your behalf. This is called a diversified portfolio and they charge you a fee to do this.
Association of Superannuation Funds of Australia (ASFA) has calculated that for a healthy retiree, between ages of 65 and 85 they will need ~$43k per year as a single and $61k as a couple. This equates to a lump sum of $640k as a couple and $545k as a single in retirement (also assuming a partial aged pension).
Those numbers are big. We know disciplined saving plans are important, think of your retirement as a huge one to make sure you live the life you choose and your super doesn’t run out before you do.
The good news is, that by increasing super contributions when you’re younger can have big big (compounding!) effects when you’re older.
Most people can choose where they get their super contributions paid into.
Speak to your employer about that
When choosing a super fund, check out comparison websites such as Canstar.
Things to look for in a super fund (ASIC Moneysmart):