I've always had an avoidant attachment style when it comes to planning for retirement.
Any time I get too close, I retreat.
But then I turned 40, and it hit me: if I want to be that fabulous old lady jet-setting around the world (preferably up the pointy end of the plane), it's probably time I got a bit more comfortable with the whole idea.
To help me wrap my head around retirement I spoke to Lynda Cross, Head of Guidance at Aware Super.
According to Aware Super's 'State of Retirement' report, I'm not the only one who finds it all confusing, a little scary and definitely like something future-me can deal with.
Lynda told me 63 per cent of Australians over 45 surveyed feel anxious or concerned about retirement. Plus, a huge 91 per cent of the women they surveyed worry about running out of money in retirement.
"It is complex," said Lynda. "There's no way around that. It just is. But putting some time in now to understand your super can make a difference to your future."
And before you freak out, keep in mind "understanding your super" doesn't mean becoming a financial expert because there are actual experts around who can help us.
"Your super fund can offer seminars, webinars, in-person events or online tools like Aware Super's free My Retirement Planner," said Lynda. It helps you estimate how much you'll need for retirement, when you might retire and gives you a step-by-step action plan.
And it's worth it — members who educate themselves are up to 2.6 times more likely to take action and boost their retirement success.
According to Lynda, "it's never too early to start planning" and small actions now can have significant positive impacts in the future.
To understand the difference an early start can make, Lynda gave me a super-simple explainer on compound interest.
"By the time you retire, up to 50 per cent of your super could be from compound interest earnings," she said. "The easiest way to think about compound interest is like a snowball rolling down a hill. It starts off small and it continues to grow and get bigger over time.
"So even adding small amounts to your super today can make a big difference to your future later."
"Retirement is one of the biggest moments in your life so getting expert help to make good choices is important," Lynda added.
"A financial adviser or an expert at your super fund can talk you through everything from age pension and making the most of tax strategies."
You can also discuss strategies for improving your retirement position such as paying off debt, downsizing or making voluntary contributions to your super — and the sooner you start the better off you may be down the track.
"Contributing $10 a week starting in your 20s for example is probably going to be better than say, trying to dump $100 a week during the last five years of your retirement," said Lynda, thanks to compound interest.
So yes, it literally pays to think about it sooner.
"At Aware Super we have lots of free webinars, videos and guides including our Retirement Guide. It's free to everyone and a great place to start planning for what you want your retirement to look like — even if it feels really far away."
The $1 million figure gets bandied around a lot but the truth is, said Lynda, there is no magic number. Phew!
"The key is to understand what you're spending now and the lifestyle you want in retirement to help inform how you plan.
"Most people need around 70 per cent of their current take-home pay to maintain their lifestyle in retirement. But everyone has different things that they want to do, different lifestyles they want in retirement. So everyone's 'magic number' is unique."
And even if a cool mill is your goal, the thought of getting there might make your head hurt (mine does). But again, the financial experts can help you get really clear on the steps to take to achieve that goal.
Here's a sobering stat: thanks to career breaks or reducing work to part-time, women can end up with around 25 per cent less super than men by the time they retire — so it pays to pay attention during these career shifts.
"About a third of that gap is attributable to career breaks," Lynda explained, "and the remaining two thirds is attributable to the gender pay gap."
But there are things you can do to mitigate this and getting to know the system is the first step to closing the gap.
If you have a partner, Lynda suggests having an open discussion about the options available so you can start to level the playing field.
"For example, your partner can split a percentage of their contributions with you while you're not working. That way you kind of share the impact of that break rather than one person wearing it."
Clever!
"First up, if you haven't already, consider consolidating your super," said Lynda. I'm going to give myself a big gold star because I've already done that and can confirm: it's so, so simple. But always check what insurance cover you might be giving up before you act.
"Multiple accounts mean multiple fees so combining them into one can save money," Lynda explained.
"The other thing is that [in having several super accounts], you might have multiple lots of insurance cover which you're paying premiums for. Not that you don't need insurance cover — I think everybody does — but it's about making sure you've got the right type and level of cover and you're not doubled up."
You also want to make sure you are with a top-performing fund over the long term and review your investment strategies — and before you freak out, remember, you don't have to personally do all the leg work.
"Talk to your fund," said Lynda. "Make sure it suits your age and life stage to maximise your returns."
While I used to see retirement as a faraway blur — a little scary and a lot confusing — I can now officially say I'm feeling excited about getting to know my super.
Now if you'll excuse me, I've got a future to plan.
Visit Aware Super to start feeling confident about your future.
Aware Super's Future Saver High Growth option average return over 10 years to 31 March 2025 was 8.09 per cent p.a.
SuperRatings Fund Crediting Rate Survey, March 2025. Based on SR50 Growth (77-90) Index. Returns are after tax and investment management expenses but before the deduction of administration fees. Past performance is not an indicator of future performance.
Consider if Aware Super is right for you and read the PDS & TMD at aware.com.au/pds before deciding. Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. Before consolidating, consider if this is right for you, including the loss of any insurance cover from your other funds, the impact on your investments, and potential tax implications. You may wish to speak with a qualified financial planner before making this decision.
Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee. Advice provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super. Issued by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340) as trustee of Aware Super (ABN 53 226 460 365).
Feature Image: Getty.
