Why super matters!

One of the most common statements I hear from people is that my super balance is so low, there’s nothing a financial planner can do for me when in fact, these are the very people that need my help the most.

For people who feel like this, it is important to know that if your super is low, you will most likely qualify for the full age pension, which is a great safety net for all Australians reaching retirement age.

So, their super then becomes all about topping up their age pension entitlements.

That is what makes it more important. For so many people in this situation, taking your super seriously will mean the difference between just getting by from one pension day to the next and having some spare funds through retirement and enjoying life.

One of my first clients came to me with a jumble of super funds, all with small balances. Centrelink had told her that together the balance was so low that she should just close them down and enjoy spending the money.

Instead, she came to me and asked my advice. We combined the funds into one account and then proactively invested the funds into safe, listed companies paying high fully franked dividends. As she was still working, it only took a few years to get the balance above $100,000.

Then when she did stop working, I was able to set up a monthly payment of $500 a month. That was some twenty years ago, and the account has survived through the global financial crisis and all the other ups and downs of the share market.

Today the portfolio is worth $138,000 after all fees and charges and after paying out $6,000 a year for almost twenty years, although that too has increased now to slightly more than $7,000 a year. I expect this account to continue in much the same way for another 20 years.

That one additional payment each month has made the world of difference to her throughout her retirement, and it will continue to make a world of difference.

It means that she can treat her grandchildren on their birthdays. It means she can buy new clothes when she needs them and not when she sees something nice in the local op shop. It means a bit of dignity in retirement.

So that is why I am so passionate about providing superannuation advice to those approaching retirement. It’s because I know I can and do make a real difference in people’s lives. Not just for this year but every year through their retirement which can last for decades.

Think about it. While there might be a hundred reasons why your super balance is not as high as you would like it to be, one of the reasons is most likely because in the past you just haven’t made the right decisions. You just haven’t taken the interest you should.

You’re not alone. Life is really busy and there are always a hundred things to do in any given day and for most families any dollar that is earnt can be spent four or five different ways without putting too much thought into it.

But now while you are in the last few years of your working lives, this is the time to be putting money away and super is the best place to put it.