Superannuation-Planning-Newcastle-BMK-Financial-ServicesSuperannuation – Escape the 95%

The Problem

What does this mean? You have probably heard a financial commentator, the newspaper, a blog, or a friend say the following at least once in your life:

“5% of the people own 95% of the wealth” meaning that the richest 5% of people on earth own 95% of the assets. Whether this number is correct has always been a matter for contention, however it’s probably not too far from the truth considering the likes of individuals like Bill Gates, Warren Buffet, Carlos Slim Helu, & Mark Zuckerburg.

What you probably have never heard is another similar statistic that effects you:

Only 5% of the Australian population currently become ‘fully self-funded retirees’, meaning that they don’t rely on any Centrelink pension or other form of subsidy to fund their retirement. It’s probably no co-incidence that the statistics are very closely aligned to each other.

This leaves the remaining 95% with a problem. They need to either depend on a full or part government pension, or learn to survive on less than they actually need in retirement, pointing towards a pretty miserable retirement.

Unfortunately this problem is set to get worse with our population ageing and retiring at a faster rate than they are being replaced by younger workers. To add to this dilemma, the ageing population are also living longer meaning that government support is being severely stretched with extra aged care costs(i.e. according to governments ABS data).

This simply means that the pool of money that will be available for social security over the next few decades is diminishing fast. Hence the governments recent announcement that it intends to push the compulsory retirement age out from 65 to age 70 over the coming years.

The Solution

It’s not all doom & gloom. If you want to escape the 95% or at least the majority of people that will be reliant on government handouts it is possible for most.

To become ‘self-funded’ the answer is to start saving on a regular basis inside super, and start saving early. If you do this you can take advantage of the incredible power of ‘compound interest’, and give yourself the opportunity to take part in any sharemarket boom that may occur between now and your retirement. Of course nothing is guaranteed, but if you do nothing and don’t even participate, then the outcome will surely be negative.

You need to make saving a ‘habit’. The same discipline that you would apply to paying off your mortgage is required with saving and investing. If you start late it may not be possible, but at the very least you should be better off than if you did nothing or just ignore the situation.

My advice is to at least give yourself the chance to reach your goals, and let Brad Lonergan at BMK guide you to a successful future with your Superannuation.

Contact Brad Lonergan – 0423 621 120 or email at

‘BMK Financial Services Pty Ltd’ is a Corporate Representative of ‘Charter Financial Planning Limited’ – AFSL # 234665. A member of the AMP Advice Network