WA Super News

Rely on super, not housing growth or inheritance

15/11/2018

Whos the boss eDM article image3

According to the recent WA Super “Who’s the BO$$” survey conducted by The West Australian and Core Data, less than a third of Western Australian households are following a disciplined budget and saving regularly. Therefore it’s no surprise that 72 percent of Aussies are relying on housing capital growth for their financial future. At the same time, two in five are expecting a future inheritance. Unfortunately, half of those wanting to leave an inheritance to their children believe they won’t have anything left. And of those baby boomers that will have money in retirement, 80 percent of them would rather live in the moment and spend their kids’ inheritance.

So to the two thirds of you out there who don’t budget, maybe it is time to start.

There’s a famous quote: if you fail to plan, you plan to fail. The same goes with your financial future. What steps should you take to ensure you are not finding yourself scratching your head, wondering where it all went wrong as you reach retirement? There are 5 simple steps that we’ve listed below, but first we’ll share more insightful information from the survey.

Interestingly enough, 90 percent of Gen Ys, Gen X’ers and Baby Boomers agree on one thing – they will need to rely on their superannuation for their financial futures. 

That’s good news, I suppose. Because it implies people like you, understand the value of your super in retirement.

The bad news though is that among those with a super account, only 17% are confident the current balance of their super is enough to achieve the ASFA standard for a comfortable lifestyle in retirement (which is $42k per year for a single person).

This is not surprising considering so few Western Australians have a disciplined budget, which implies they may not be doing enough thinking about this topic. Most super funds, including WA Super, have a high proportion of what are known as ‘inactive members’. These are people who have a superannuation account, but haven’t touched it, accessed it, added to it, and probably not even thought about it, for over 12 months.

It’s their hard-earned money, yet it has been forgotten about for a variety of reasons. And there’s $18 billion of lost superannuation out there belonging to these inactive members.

So perhaps instead of hoping for an inheritance, which your family is already planning to spend, or relying on a capital growth in your house value, think carefully about your super now. Start early, with small amounts even, but be consistent. You have a better chance of increasing your superannuation balance over your lifetime than you have winning the lotto - even though according to the survey, 30 percent of people are hoping for this windfall. But after googling this, we discovered there’s a 2,521,090-to-one chance of winning Oz lotto (with an 18 game ticket)¹. 

You may be better off focusing on your super. Here are 5 simple steps to get you started:

  1. Reunite with your online Super account by logging in here
  2. Get to know your Super a little better. Check how your super is invested and whether you're adequately insured. 
  3. Find any lost Super. Use our Find and combine tool in member online. 
  4. Get personal financial advice. Use our SuperClick advice tool available in member online to find out how much money you will have in retirement and how much you will need. 
  5. Give us a call. We are always happy to help you get your super sorted. It's only by doing the boring stuff that we can get to enjoy the best things in life. 

This article originally appeared in the West Australian newspaper on 13 November 2018, written by Fabian Ross, CEO of WA Super.

Source: ¹https://www.sbs.com.au/news/what-are-your-chances-of-winning-oz-lotto.

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