A couple of years ago, consulting firm Deloitte released a report estimating that the Australian superannuation pool will rise to an eye-watering $7.6 trillion in 2033, up from $1.6 trillion.
That sure seems like a lot of cash…
Yet, while this projected growth in retirement savings is nothing short of impressive, it still belies a "harsh reality."
As The Sydney Morning Herald has reported…
"Increasing life spans, the effect of the GFC on superannuation accounts and the fact that the superannuation guarantee started only in 1992 is leaving older workers underfunded."
What's more, "most of those retiring in the next 20 years will not have the lifestyle in retirement they are seeking. They will have to work for longer and increase contributions to their super if they are to afford a comfortable retirement."
Even younger workers will be $500,000 short!
Australia's superannuation retirement system may be the envy of the developed world, but there's clear proof that few of us will be able to rely on superannuation alone.
A harsh reality indeed!
Even younger workers are up against it. A 30 year old making an average salary of $60,000 annually will have an estimated $1.1 million by retirement at age 65.
A cool $1.1 million! You'd be forgiven for thinking that looks like a great deal of money indeed. Unfortunately…
The sad news is that $1 million in super probably won't be enough.
In fact, it falls nearly half a million dollars short, if you want to enjoy your retirement, with the ability to travel and truly relax after decades of hard work…
(Exactly the sorts of things you'd like to be doing in your retirement, after all!)
The Deloitte report went on to detail that, to have a comfortable retirement, "a 30-year-old male would need retirement savings in 2048 of $1.58 million and a female would need $1.76 million."
Yes, not only are women structurally disadvantaged by our retirement savings system, they also need more by retirement because they're likely to live longer!
The bottom line is, whether you're retiring soon or still have 30 years more to work, your super alone probably isn't going to cut it.
Now you can sit on our hands and worry about all this, or you can use our good sense and do something about it.
Here is your action plan
It's simple enough. Live below your means. Save more. Invest more! Share what you've learned with your nearest and dearest.
And — I'd humbly suggest — position yourself for years of market-beating returns by buying shares of Australia's very best companies.
I'm talking about ASX growth stocks. I'm talking about dividend shares, particularly those paying fully franked dividends.
At The Motley Fool, providing this sort of investment advice is our bread and butter. Serving the individual Australian investor – helping YOU to invest, better – is our raison d'etre. It's our entire business model!
Over the years, our flagship Motley Fool Share Advisor stock picking service has already identified some of the ASX's very best performers, including…
Corporate Travel Management Ltd (ASX: CTD) — up 377% over the past three years
Sirtex Medical Limited (ASX: SRX) — up 450% since April 2012
Premier Investments Limited (ASX: PMV) — up 110% in just over two years
Stating the obvious, winners like that can quickly put a rocket up your SMSF balance.
The sad reality is that with the RBA's cash interest rate sitting at just 2%, leaving your money in term deposits simply isn't going to cut the mustard. You simply have to take on some risk — by investing in the share market — in order to generate such returns.
Whether that is by subscribing to our popular Motley Fool Share Advisor service, or you have the ability, skills and temperament to do it all yourself, I wish you happy and profitable investing – and a comfortable retirement.
Editor's note: Motley Fool Share Advisor's ace stock picker Scott Phillips recently recorded this short 2 minute video. Find out how some of Warren Buffett's early investors turned $10,000 into $175 million. Click here now to view the video.
