Money Matters

What living longer means for your super


We’re living longer and staying healthier than ever. But an increased life expectancy means a longer retirement, and it’s important to think about what that means for your super and savings.

The Australian Institute of Health and Welfare tells us that boys and girls born between 2018 to 2020 can expect to live around 30 years longer than their counterparts in 1891 to 1900. Advancements in fields of health, wellness, medicine and technology are significant and it’s great to think we will have longer lives, but it’s important to think about what impact that could have on the longevity of your retirement fund.

This is where a ‘future fit’ superannuation strategy comes in handy. Beyond the basics, it’s important to really consider your life and longevity as part of your personal saving strategy.

Set yourself up for success

Thanks to the power of compound interest, the way you save in your 20s and 30s may snowball into what eventually becomes your retirement fund. The more you put in earlier, the more you may get out later. And while you might think retirement is tomorrow’s problem, we think there’s never a better time to plan for when you’re older than right now.

Estimate how much you’ll need

Consider the type of retirement and lifestyle you want, read financial guides on how much that will cost, and figure out your life expectancy. Look at the life expectancy of your current age group instead of the life expectancy of someone born at the same time as you, as your life expectancy increases as you age.

Use tools and ask a pro

Moneysmart’s Super Calculator can help you figure out how much super you should have when you retire and how much your super fund fees will affect your final amount, and if you don’t love the outcome, a financial advisor could help get you on track. We’ve also put together this superannuation table so you can easily check to see where you’re at with your super balance.

Consolidate your super accounts

If you’ve worked a couple of casual jobs over the years or opted into your workplace’s default super fund each time you changed jobs, you might have multiple super accounts floating around that you’re paying different sets of fees on. Compare fees between your super providers and once you’ve decided which super fund you want to keep, you can either contact them to consolidate your other funds or head to myGov if your myGov account is linked to the ATO.

Ways to increase your super savings

Once you’ve sorted out your super fund, it’s time to start thinking about how your savings could work even harder. The earlier you start, the bigger the impact and the more prepared you’ll be for whatever age you find yourself at retirement.

Switch up your super strategy

Being young has financial advantages – you could look into different investment options and super strategies. Talk to a financial advisor to find out what’s right for you.

Make additional super contributions

You could contribute more of your pre or post-tax income to boost your fund over and above the standard contribution for your wage (subject to contribution caps). The more you contribute, the more it may grow down the line. The government may also make contributions on your behalf if you fall under a certain income level.

Review your retirement plan often

Your retirement plan should be tailored to you and your circumstances as they change over the course of your life. Check in on your retirement fund and strategy every few years, and discuss it with a financial advisor accordingly.

They say the best way to predict the future is to create it for yourself. While no one can predict what the next few decades will hold for you, small financial decisions made early in life could point you in the right direction for a comfortable retirement. After all, you’ve earned it.