All you need is a job and some time. With regular modest superannuation contributions you could have up to $500,000 or more in retirement savings! It doesn’t matter what age you are – 25, 35, 45 or 55 – it is possible to turn $4,500 into $300,000 and more, just by turning up to work.
How it works:
Peter’s plan – at 25
Peter is 25 and started a new job paying $50,000 a year. He has no super because he was previously self-employed, but now he wants to start planning for his retirement. His friends say “why worry at this early stage” but he has seen his grandparents struggle on the
Peter does some research and is surprised to discover that he is one of the lucky generation who will experience the benefits of 9%
Peter uses the superannuation calculator located on the consumer website (www.fido.gov.au) of the Australian Securities and Investments Commission (ASIC) to work out what his employer’s contributions will deliver. If Peter works until the age of 65, that is, for 40 years and he remains on $50,000 in today’s dollars* (that is, adjusted for inflation) for his working life, he will receive $346,000.
Peter will have $346,000 in today’s dollars* in his super account just for turning up for work each day. That’s a big figure from a small start of $4,500. If Peter contributes a modest 2% of his $50,000 salary in after-tax contributions for the same period, that is $1,000 each year for 40 years, he will have $469,000 in today’s dollars* when he retires, again just for turning up for work.
Peter then uses ASIC’s ‘retirement planner’ calculator. He is amazed that without doing much at all, he will have an income of more than 80% of his working income by the time he turns 67 (
You can read the stories of Peter (25), Siobhan (35), Maura (45) and Jack (55), and how they turn $4,500 into $300,000 and more, in Trish Power’s latest book, How to make $300,000 without trying! (30 ways to save your super) (Wilkinson Publishing).
*Today’s dollars: the calculations take into account the future cost of living increases and convert the balances into a figure that represents what your super balance would deliver in today’s money.
Source: Extract from: How to make $300,000 without trying! (30 ways to save your super) ($7.95, Wilkinson Publishing: available in bookstores and more than 400 newsagents across the country or by visiting www.wilkinsonpublishing.com.au). The book contains 30 tips on how to boost your super savings without spending any money on financial advice or financial products. Click here for more information on the book.
