A Brighter Future with Morgans Noosa
The question of ‘how long is a piece of string’ may produce an infinite number of responses. Luckily, ‘how much is enough’ is an easier question to answer. John Caruso discovers that with some thought and careful modelling you just might land on a figure that keeps you smiling while watching the sun set.
Now, I don’t know if I’m alone on this one, but I’ve been thinking about retirement for a very long time. Maybe I was in my thirties. Maybe younger! The scenes that played out in my head weren’t of an individual in a rocking chair in front of the TV; they were scenes filled with lots of travel, exotic locations, beaches and bicycles. And this idea of leaving the ‘rat-race’ and really living life to its full potential is still very appealing.
Fast forward a couple of decades and here I am, a fifty-something dad with a teenage son, still dreaming of retirement while at the same time happily engaged in the day-to-day work-life thing.
It goes without saying that the foundation for these ‘flights of fancy’ are of course, the ability, or capacity to make these dreams happen. Capital. Coin. Folding stuff. Financial independence. There, I’ve said it.
Surprisingly a survey conducted by a popular online news site in October of last year revealed that just 18% of Australians think they have enough money to retire comfortably so for many, those dreams are just that. Dreams.
What’s equally surprising is that the same survey showed that less than one in five of us are making extra contributions to a super fund. We may all have our goals, feel we don’t have enough, and yet we’re not doing anything to rectify the situation.
So, how much super is enough? Let’s ask the experts.
Morgans Noosa Principal Andrew Stafford says you need to think about what age you’d like to retire, what your key goals are and what your spending pattern might be like once you retire.
“There’s modelling that we can do to explore future outcomes so you can identify what you need to do to reach your financial goals.
“Without proper planning you could find yourself in a position where you have to become a lot more disciplined as far as spending goes which means lifestyle becomes more restrictive and we know that people often envisage a retirement where travel, for example, becomes a priority and if you fail to plan then there’s a real risk that you’ll fall short of those dreams and goals.”
Yes, I’ve heard that one: failing to plan is planning to fail.
Inflation is another factor that will have a negative impact on your savings.
“It’s important to make sure the money you’re saving is working efficiently for you,” Andrew said. “It’s worth noting that we’re currently living in a high inflationary period where the cost of living, groceries, fuel, rent etc, are all very expensive and you don’t want that eating into the money that you’ve put aside.
“Speaking to a financial planner can help you plan these things out and map a pathway towards achieving the goals you’ve set for yourself.”
Believe it or not, the government will help you put a little extra away with a reduced tax rate on the coin you use to top up your super.
“There are many tax advantages in sacrificing some of your salary on top of what your employer contributes and coupled with the compounding effect over multiple decades the younger you are when you start, the healthier that super nest egg will be,” Andrew explains.
When the day comes and you do pull the pin on full time work, what then? What’s the best option for that hopefully, large lump sum of cash?
Andrew and the team at Morgans Noosa can help with that transition into retirement.
“Your funds can be paid out as a pension or an annuity and there’s tax advantages associated with that in relation to your tax threshold and we can help manage that process moving forward to make sure that you’re achieving your financial goals,” he said.
“There’s lots of flexibility available when it comes to utilising your superannuation. Speaking to one of our financial planners would be the best way of exploring all those options.”
There’s a lot to consider and it can be overwhelming. If your head, like mine, only has the capacity to conjure up images of a fancy cocktail with a tiny umbrella in it while watching the sun set on a beach in Khao Lak, then partnering up with a financial expert to help you with a plan is simply good advice.
For now. I’ll settle for a fancy cocktail while watching the sun set over the Noosa River as I consider the good advice I’ve been given and how to ensure my super is super enough to keep the cocktails coming in the future.
Disclaimer: The information in this article is of a generic nature. Please seek professional advice tailored to your specific needs before making any investment decisions.
