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Statewide Superannuation |
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Statewide
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Your Key To Superannuation You Can Trust
Super Way to take Control 14 September , 2009 COST OF LIVING AFFECTS LIFESTYLE You notice the impact on your household budget when the cost of electricity, council rates, groceries and health care goes up, but have you thought about how increases in the cost of living will apply to your needs in retirement? While most people hope to have fewer debts and no mortgage in their later years, there are always ongoing expenses that need to be factored in when you consider the kind of lifestyle you will be able to afford. The Association of Superannuation Funds of Australia prepares figures outlining budgets for retiree households on two standards of living - modest, which is defined as better than the age pension but still fairly basic; and comfortable, which offers more leisure activities, plus health insurance, travel and other items. These figures show that living costs for a couple living comfortably in retirement rose 0.7 per cent between the December 2008 and March 2009 quarters, or 2.6 per cent over 12 months. Between now and when you retire, there will be regular increases in the cost of living, and they will have an impact on the value of your retirement savings. The most recent standard shows that a single person looking for a comfortable retirement lifestyle needs to spend $37,822 a year, while for a couple it is $50,771. That means saving up to $500,000 by retirement (in terms of today's value). For many people, simply continuing their current level of super contributions means they might not reach that target - unless they take action. If you only have enough superannuation for a modest retirement you will have to sacrifice things such as a new car, holidays, going to the cinema and dining out. If this scenario sounds out of the question, you can add more to your super payments, and look at the investment options you've chosen for your superannuation. Thinking about how much money you will need in retirement can seem like worrying about something that's too far off, but unless you want to rely on the age pension, now is the ideal time to give some thought to the lifestyle you want. Many super funds provide advice on how best to grow your super, and some, including Statewide, offer members free financial planning advice.
The information provided above is of a general nature. It does not
consider your specific needs nor is it intended to be financial product
advice. You should obtain independent financial advice, and consider the
applicable Product Disclosure Statement before making an investment
decision.
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