How to retire in comfort

Women retire with far less superannuation than men, so Money founding editor Pam Walkley investigates strategies to boost your savings.

If you want a comfortable lifestyle with a few luxuries when you retire, you need to engage with your superannuation savings as early as possible. And maintain that interest, even when you are drawing money down from your super to live on.

Women have a harder time accumulating super than men, with many taking time out to raise children or care for ageing relatives. And many still earn less than men.

At retirement age, men have an average balance of $322,000 compared with $180,000 for women, according to Australian Bureau of Statistics figures for 2013-14. And, on average, women live longer.

To help grow your super balance, choose a fund with low fees and a solid history of strong returns. You can do this using comparison sites such as Chant West (chantwest.com.au) and Morningstar (morningstar.com.au/Tools/NewFundScreener), says Damian Hill, the chief executive of REST Industry Super.

If you need advice on your super, start with your super fund. Many big funds offer limited advice, either for free or at a low cost. For example, REST offers its members 24/7 personalised advice through its new online advice platform.

“Members have the option of talking to our advice specialists over the phone or via live webchat. We won’t charge extra for simple advice,” Hill says.

On average, both sexes are retiring with less than the $545,000 that the Association of Superannuation Funds of Australia says a single person needs to enjoy a comfortable retirement. A couple needs $640,000. This assumes that you have fully paid off home.

Even if you are approaching retirement, or indeed retired, it’s never too late to improve your position (see Quick fixes, below).

But the earlier you start the better. While you’re employed, make extra contributions through salary sacrifice. This means you give up some of your pay and put it into your super, saving tax because money going into super is taxed at only 15 per cent.

In the current financial year, those under 50 can contribute $30,000 and those 50 and over $35,000, including the 9.5 per cent superannuation guarantee levy paid by your employer. This will drop to $25,000 for everyone on July 1, 2017.

Even putting aside $10 a week toward your super through a voluntary contribution can add thousands to your retirement balance over the long term, Hill says.

His other tips to make maximise your super:

● Take your super fund with you when changing jobs to ensure you don’t pay multiple sets of fees.

● Consolidate your super into a single fund. Many funds help you do this.

● If you’re not earning an income, or it’s less than $13,800 a year, your spouse (which includes your de facto or same-sex partner) can add to your super through spouse contributions.

Those approaching retirement, over 55, can combine salary sacrifice with a transition-to-retirement strategy.

This means you can draw down a pension from your super, even if you’re still working, enabling you to salary sacrifice more.

“Even putting aside $10 a week can add thousands to your balance. ”