Retiring might be many years away for you, but taking the time to prepare now will help you move into a stress-free retirement when you are ready.

Step 1: Look into your current arrangement

When you’ve worked multiple jobs it can be easy to end up with multiple super accounts. If this is the case, the first thing you should consider is consolidating your accounts into one. If you have multiple accounts you’re probably paying multiple fees and may not be getting the full benefit from your money. Before you make a decision on consolidating your super, you should compare the costs, fees, risks and benefits such as insurance cover of each super fund.

Step 2: Estimate how much you need in a single year in retirement

The Association of Superannuation Funds of Australia (ASFA) provides a guide for how much the average person and the average couple may need per year of retirement. It is updated four times a year to ensure it stays in line with current costs.

To personalise it to your own circumstances you can estimate your costs per month for the following categories ASFA outlines:

  • Housing
  • Energy
  • Food
  • Clothing
  • Household goods and services
  • Health
  • Transport
  • Leisure
  • Communications

Multiply the total monthly amount by 12 and use this annual total in Step 3 below.

Step 3: Check if there is a shortfall

Now you have a rough idea of how much you want to spend each year when you retire, see whether you’re likely to reach goal by contributing to your super at your current rate by using our Retirement Calculator. It’s important to keep in mind that your income and guaranteed super contributions may increase over this time period.

Step 4: Speed up the process

Whether there’s a shortfall or you want to make sure you have more super when you retire, there are ways you can boost your super.

These include consolidating all your super into one account and using salary sacrifice to ensure that you’re making the most of the tax concessions available – typically extra contributions from your pre-tax income are taxed at a rate of 15% instead of your marginal tax rate (plus Medicare levy and other applicable levies).

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Things you should know

This article contains general advice only. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial planner before making any financial decision based on this information. This document has been prepared by Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, (Commonwealth Financial Planning) a wholly-owned, but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. Commonwealth Financial Planners are representatives of Commonwealth Financial Planning. 

Information in this article is based on current regulatory requirements and laws. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, Commonwealth Financial Planning related entities, agents and employees for any loss arising from reliance on this document. Taxation considerations are general and based on present taxation laws. You should seek independent, professional tax advice before making any decision based on this information. Commonwealth Bank is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Before you make a decision about your combining your super if you multiple accounts, you should compare the costs, fees, risks and benefits of each super fund. It makes sense to consider whether you can replace any insurance cover you may lose when you bring your accounts together, as well as any costs for withdrawing from other super funds and any investment or tax implications.