Bridging the Superannuation Gap

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  • 7/27/2019 Bridging the Superannuation Gap

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    Bridging the Superannuation Gap

    Why is it that some of the most important things in life, we often avoid and put off as long as

    possible? For example, going to the dentist, filing important paper work and revisiting oursuperannuation? Superannuation is a one trillion dollar business and arguably one of the biggest

    social issues in Australia. Recently our research team at Dovetail stumbled across the following

    statistics:

    25% of Australians aged between 65 to 69 are still working

    Post the GFC, 14% of Australians intend to work until they are 70 years or older

    An Australian couple will need $56,339 per annum for them to retire comfortably

    1 in 4 own their house, however they dont have enough money in retirement

    75% of retirees are on some form of welfare

    The Australian Government has recently announced a long-term strategy that aims to address some

    of the issues raised above, by gradually increasing the compulsory employer superannuation

    contribution rate from 9% to 12% by 1 July 2019. For those under 50, a good piece of advice is to

    dedicate at least 30 minutes per year to visiting the status of your superannuation fund. To assist

    you, there are a number of websites, such as Money Smart (www.moneysmart.gov.au/toolsand-

    resources/calculators-and tools/ superannuation-calculator) that can give you foresight and a quick

    injection of inspiration to put your super and retirement plan firmly on your priority list. So, what if you

    do not have time on your side, what are your options? Sadly, we often see many of our clients in this

    situation, however rather than hoping to win Tatts lotto where the chances are only 1 in 45 million,

    we have a solution that 1 in 5 may be able to benefit from, which enables you to continue living in

    your home/ community and secure the cash flow you need, just by refiguring the size of yourproperty. To learn more, see Frank and Joans case study below is a few quick facts:

    Frank is 67 years old, Joan is 65 years (married for 46 years)

    Owned their corner block, brick 3 bedroom house for 29 years

    In 1984, they purchased the house almost new for $58,000

    In 2012, their 655 sqm property was worth $652,000 (original bathroom & kitchen)

    They were spending $60 per fortnight having it mowed and maintained

    In June 2012, they sourced a seniors loan for $79,500 against their property

    Dovetail was engaged to subdivide their block, and provided a trusted referral for their

    bathroom and kitchen renovation Whilst the renovations took place, Joan had a hip operation with the funds

    By March 2013, their property was subdivided and they decided to sell off the vacant land for

    $350,000 and they had their property re-valued for $620,000.

    They paid off the $79,500 loan and put the remaining $270,000 towards their retirement

    fund.