Studies suggest that people need an income replacement ratio of 70-75% of their pre-retirement income to maintain their lifestyle in retirement. Contributing only the 9.5% Super Guarantee Contributions (SGC) will not result in enough retirement savings for you to generate the preferred level of income in retirement.
The table below shows how much super actually needs to be contributed each year over your total working life to ensure that your post retirement income is 70% of your pre-retirement income.
For example: If you are currently earning
- $80,000pa (Average weekly earnings) then you need to have super contributions of 16% every year (not just the 9.5% SGC);
- $120,000pa (1.5 × average weekly earnings) then you need to have super contributions of 19% every year.
Please contact the team at Everalls Wealth Management to discuss how you can top up your super contributions tax effectively, to ensure you reach your retirement income goals.