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If the system was really working, and by the system I am referring to the construct of,
‘go to school, study hard, get good grades, get a good job, buy a house, pay it off and eventually retire and relax with your grandchildren in the quarter-acre back yard, playing cricket or footy,’
was really working…then the stats mentioned above would be reversed and the vast majority of Australians today would be retiring with well over $1.5million dollars as a lump sum in their superannuation fund, equating to some $75,000 income per year, per individual, assuming a 5% rate of return.
The reality is that even though we are living in possibly the best country in the world, one that not only boasts natural beauty, political and economic stability, a lot of Australians are living a life of quiet desperation, mainly because they never truly made the decision to take control of their finances or even learn the fundamentals of how to properly invest, conduct a basic cash-flow analysis, feasibility assessments on potential investments or how to do basic things like structuring their home loans correctly and how to manage their day-to-day finances correctly.
The stark reality is that many Australians are not aware of the magnitude of the disaster facing them in the future. Research by The Investment and Financial Services Association has found that Australians do not have enough in superannuation savings to live comfortably in retirement. The savings gap has increased from national levels of about $452 billion in 2004 to $695 billion dollars as at June 2018.
This means that a significant number of Australians who aim to retire in the next decade will wake up to a grim reality when they find that their superannuation nest egg will not be able to provide them with a comfortable retirement until they die.
In 2018, data from the University of Canberra research centre, The National Centre for Social and Economic Modelling (NATSEM), found that the average Australian woman aged 55 to 64 years, was estimated to have an average superannuation balance of about $54,500 with the average Australian male’s superannuation balance at $113,200. This would realistically translate into 2 to 3 years of income before the funds are completely exhausted.
With the average life expectancy climbing into the 90s for those who make it to 65, the drain on the Australian tax payer’s and government’s purses will only escalate, as retirees will be forced to rely on the age pension as their personal funds run out. Actuarial modelling using an income of $19,399 a year as the “modest” benchmark and $37,452 as a “comfortable” amount for an individual’s needs, found Australian retirees would need a superannuation fund balance of $500,000 in order to draw down a comfortable amount each year to the age of 89; which is still shy of the average life expectancy of someone who is currently 65 years of age.
And let’s face it, what the hell are you going to do on $19,399 per year in Melbourne, Sydney or Brisbane?
Bear in mind that it equates to $373.05 per week…
Now I don’t mean to be offensive to anyone watching this video, but when you retire, don’t you want to be cashed up, travelling the world, spending time with friends and family, and splashing out on their presents – not having to worry about bills and overheads?
Well there is a solution…watch this video to find out exactly what that is.