Retirement
The $1.6m question
A $1.6 million nest egg may seem like a pipe-dream to many, but according to HLB Mann Judd, timing and dedication can make all the difference.
The $1.6m question
A $1.6 million nest egg may seem like a pipe-dream to many, but according to HLB Mann Judd, timing and dedication can make all the difference.
In an era of ongoing tinkering with the superannuation system, rising housing challenges and an increasingly casualised workforce, the idea of accruing $1.6 million in superannuation could lead many Australians to echo Dale Kerrigan and say: “Tell ‘em they’re dreaming.”
However, HLB Mann Judd wealth partner Jonathan Philpot argues it can be done provided savers start early and maximise their concessional contributions.
Noting that many 40-year-olds have $100,000 in super thanks to mandatory super payments their entire working lives, Mr Philpot said they could reach $1.6 million, or close to it, if they began maximising their super now.
However, they would need to be putting in close to $25,000 a year to do it.
That doesn’t mean older savers are without hope, he continued, urging savers to consult with a financial adviser five years out from retirement.
“As a minimum, a five-year retirement strategy focused on building superannuation will provide a few years to maximise the concessional super contributions,” Mr Philpot said.
“If you are in a position to also take advantage of the non-concessional contributions, in particular the three-year bring forward rule, careful planning is needed around the age in which the contributions will be made, to maximise the total amount that goes into super.”
‘There’d be hardly any 35-year-olds who’d be willing to put $25,000 into super’
Wealth management partner Michael Hutton acknowledged that younger savers are unlikely to choose to maximise their super over saving for a house, or paying off a mortgage.
“There’s a lot more changes happening much more rapidly, there’s no question,” Mr Hutton said on the changing employment landscape.
Younger Australians may not even enjoy the same retirement tax structures, Mr Philpot added.
“It probably won't be a tax-free retirement and all that, but you've just got to operate with the rules you've currently got in place,” he said.
“It [super maximisation] is not for everybody,” Mr Philpot said, pointing to the financial realities of sizeable mortgages.
“Focusing on that kind of thing is fine as well. It's really just an option to discuss and look at other strategies.”
RELATED ARTICLES
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
