What Happens If You Outlive Your Super?

You’ve worked hard to build your superannuation, but have you ever wondered—what happens if it’s not enough?

Retirement should be a time to enjoy the rewards of a lifetime of effort, but one of the biggest concerns many Australians face is whether their super will last. With people living longer and the cost of living rising, ensuring your retirement savings go the distance has never been more important.

So, what are the risks, and how can you plan ahead to protect your financial future?

Could You Outlive Your Super?

It’s easy to think of retirement as a long, stress-free holiday, but many retirees worry about making their savings last. Research from the Association of Superannuation Funds of Australia (ASFA) found that more than 90% of people aged over 80 had no super left in the last four years of their lives.

Women, in particular, are more financially vulnerable—only 15% of females over 60 pass away with any super savings.

If your super runs out, you may need to rely on the Age Pension. While it provides a safety net, it’s designed to cover only the basics and may not support the lifestyle you envisioned.

What Increases the Risk of Running Out of Money?

Several factors can impact the longevity of your super, including:

• Living longer than expected: More years in retirement means more years of expenses.
• Market fluctuations: Your super is invested, and downturns can affect your balance.
• Inflation: Rising costs can erode your purchasing power if your investments don’t keep up.
• Unexpected expenses: Health issues, aged care, or helping family members—can drain your savings faster.
• Retiring too early: Accessing super before you’re financially prepared can shorten how long it lasts.

How to Make Your Super Last Longer

The good news? There are strategies to help safeguard your financial future, whether you’re still working or already retired.

If You’re Already Retired:

• Be mindful of withdrawals: You only need to take out the minimum drawdown amount from your account-based pension unless you need more for expenses.
• Maximise government support: You may be eligible for the Age Pension, Seniors Card, or other concessions that reduce your expenses.
• Consider additional income streams: An annuity or other investment income can help supplement your super.
• Keep your investments working for you: A well-balanced investment strategy can help you grow your savings and keep up with inflation.

If You’re Still Working:

• Boost your super while you can: Salary sacrificing or making after-tax contributions can give your super a serious boost.
• Consider a Transition to Retirement (TTR) strategy: If you’ve reached preservation age and are still working, this can help grow your super while managing tax.
• Plan ahead: Thinking about retirement three to five years before you stop working allows you to fine-tune your finances and set yourself up for success.

Navigating Retirement with Confidence

Outliving your super savings isn’t inevitable; it’s a calculated risk that can be managed with the right planning. If you’re feeling unsure about your retirement savings, you’re not alone. At LIFE Financial Planners, we specialise in helping you and many other West Australians understand their options.

Let’s start planning for the retirement you deserve; contact our West Perth team today at (08) 9322 1882 to schedule your first complimentary consultation and take the first step.