Over the last 4 years or so, the number of Australians who have upped their Superannuation ante has grown leaps and bounds. Apart from their compulsory 9.5%, they are looking to put in as much voluntary contributions as they can. Imagine our countrymen pouring in $36.5 billion besides the compulsory 9.5% in 2013.
More Super members opting for voluntary payments
Take the case of Australian Super, by consensus, one of the largest grabber of the Superannuation pie. Out of the 2.1 million members they have, about 170,000 members went for extra payments and they averaged a figure of $7,800 in the financial year 2013-14.
It is not a bad thing that we are focusing, finally, on something that should have been on our priority list long time ago. Many of our predecessors have missed the trick and they are looking forward to a bleak retirement proposition.
What’s adequate for a decent retirement?
9.5%, the compulsory Super contribution figure won’t see you going anywhere beyond the regular run of groceries. To salvage a decent retirement for one’s self, something close to $42,000 a year is required. Even if we talk ‘modest’, nothing short of $23,000 will suffice. If you are a couple, the ‘decent’ figure goes up to $58,000 and ‘modest’ figure goes up to $33,000.
Compulsory contributions won’t take us far
The 9.5% figure, when it rises to 12%, will still give some leg-space to the retirees. Till that time, more and more of voluntary contributions will have to keep coming in. For the next 7 years, it will stay at 9.5 though. For starters, only from July 2021 will a rise of 0.5 percent begin to take place, culminating in 2025 when the compulsory Super stands at 12%.
