Why I’m not relying on my superannuation to fund my retirement
A lot of people look forward to the day they can retire and pursue more of the things they enjoy, such as hobbies or travel. Whether you dream of cruising around the world, campervanning around Australia, or just pottering about in the garden, improving your golf skills, or whatever it may be – the big question is: how much do you need to make all your hard work for retirement a reality?
According to the Association of Superannuation Funds of Australia’s Retirement Standard, to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000. The below table shows what a comfortable, moderate, and age pension lifestyle might look like based on these figures.
I don’t know about you, but the income I can expect to receive in my “comfortable” retirement isn’t going far. Frightening statistics! On top of this the maximum aged pension for a couple currently sits at circa $32,000 per year. In my opinion another worrying number.
This really highlights the importance of investing outside of your employers compulsory superannuation contribution. Whether your chosen investment vehicle is property, or shares or vintage cars or stamps…….whatever you feel is going to work for you…….just do it! Your future retired self will thank you.
As a buyers agent and property strategist and long-term property investor my chosen asset class (obviously) is property. Do you think I was thinking of my retirement when I purchased my first investment property at eighteen? Absolutely not. Am I grateful for taking the plunge, educating myself and getting some help along the way? Without a doubt.
Here are three reasons why I feel property will remain a popular asset class (and why I will continue ploughing my dough into the asset class):
You have so much control over bricks and mortar. You can add value to it, you can see it, you can touch it. It’s a physical asset that gives you ultimate control. Of course market forces will ultimately decide what it’s worth, but the fact it is tangible is really appealing to most.
Stability
The property market is much less volatile than the share market, at least partly due to the effort required in order to purchase a property – in terms of due diligence, legal checks, inspections, length of settlement periods and so on. This means that property is less prone to short-term speculators than paper asset classes. This along with the relatively long amount of time it takes to liquidate a property asset – also reduces market volatility significantly.
Leverage
Borrowing to invest in property also means you get greater access one of the oldest and most powerful tricks in the financial book: leverage. Lenders will lend up to 90%+ of the value of the property, whereas they may only lend up to 50% of the value of a share portfolio. This greater borrowing power allows you to benefit from the capital growth of a larger asset.
If you are serious about taking control of your financial future and want to understand how property can play a big part book in a free call here. I’m happy to share with you (worts and all) my personal investing story as well as how I’ve helped a number of people build high performing and strategic portfolios and be on the path to replacing their income. You will be surprised with what you can achieve with education, help and guidance.
Ben Plohl – Founder & Director
BFP Property
ben@bfpproperty.com | +61 434 561 378
**All information published has been collated and prepared in good faith. No representation is given or implied as to its accuracy or interpretation. Please ensure you rely on your own research before making any investment decisions**
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