Superannuation Millionaires – It Is Simple Maths!
Let us have some fun with simple maths.
To have a million dollars in 40 years from now (or ‘for each million dollars’ you want) at an 8% return, you need $46031 now.
Or if you only have 30 years, you need $99,377.
This might be realistic if you have gathered enough superannuation by the time you are around 30 years of age with 30+ years of compounding, along with the benefit of all future contributions to your fund, but you also need to consider (1) the ups and downs of investment cycles which should play to your benefit over the very long term and (2) $1 million today will have much less value to you in 3 to 4 decades due to inflation.
For many, the Age Pension is not enough to retire upon. Sure, it is meant to keep pace with wage rises in the economy but retirees often find their costs of living outstrip the economy as a whole, when fast-increasing healthcare costs and power prices take up such a large portion of their budget every week.
So the best solution is to provide for your own retirement. Careful planning and a lot of genuine lifestyle sacrifices applied early and throughout your working life, long term superannuation saving may be your key to wealth and absolve you of any need to kowtow to the social security rules of the day to apply for a modest pension.
The tax effectiveness of the superannuation system can help you get there!
How many millions are you aiming for?