Australia’s screen professionals generate billions of dollars in annual economic activity while shaping the country’s national identity and cultural narrative. But what happens when the cameras stop rolling?
A comfortable retirement should be assured after a working career that contributes to the country’s cultural landscape, economy, and social fabric. Yet it is far from guaranteed given the inherent challenge of a career in the arts.
Self-employed professionals tend to contribute less to their superannuation than traditional employees, who already receive regular employer contributions via the super guarantee.
Almost half (44 per cent) of self-employed workers make no super contribution, according to a government report on retirement planning, saving and attitudes. While respondents cited several reasons, the main impediment was a lack of extra income (43.1 per cent).
What makes a comfortable retirement?
There is no single answer to what defines a comfortable retirement given everyone is different. The question is made harder given the complexity of Australia’s retirement system, which is built on three interacting pillars: super (and other private savings), the government Age Pension, and home ownership.
The government Age Pension provides a significant cushion for retirees. Almost two-thirds (63 per cent) of Australians aged 65 and over received income support payments – with the vast majority of that the Age Pension – according to government data. While the Age Pension payment is low relative to the average full-time salary, retirees’ cost of living is usually substantially less than working Australians.
Home ownership also underpins a comfortable lifestyle. The government Age Pension is means tested and doesn’t include the significant value of a retirees’ home, whereas rent relief provides a much lower relative level of subsidy.
Older Australians who rent in the private residential housing market, and early retirees who leave the workforce before age pension eligibility (which has risen in recent years from age 65 to 67), are at particular risk of poverty, according to the government’s 2020 Retirement Income Review.
Super is a tax-advantaged way to save more for retirement that can provide more certainty and flexibility in retirement. It is generally locked away until someone stops work after reaching the “preservation age” of 60, or until someone reaches the age of 65, at which point they can access their super even if they’re still working.
The numbers behind retirement
One common benchmark used as a retirement savings starting point is the Association of Superannuation Funds of Australia’s (ASFA) retirement standards. They provide estimates for a comfortable and modest retirement.
The ASFA comfortable annual expenditure equates to about $595,000 in super for a single person and $690,000 for a couple, assuming retirement at age 67.
While the ASFA comfortable standard can seem daunting, each person’s actual expenditure varies significantly and is closely related to their lifestyle during their working years. Retirees’ expenses tend to fall dramatically, particularly after the first few years when many older Australians mark retirement with extended holidays or travel.
And a comfortable retirement will look different for everyone. Upon reaching preservation age, your super can be used to pay you a regular income from as little as $10,000. Products like a Cbus Super Income Stream (SIS) keep your super invested and working for you, providing a regular and tax-effective income even if you stop working. If you receive retirement income from super, you may also still be eligible for the government Age Pension.
A great place to start creating a more individualised retirement lifestyle forecast is through Media Super’s retirement income calculator, which can show you how much income you’re on track to receive in retirement. It can reveal the impact that higher super contributions or changing your retirement age have on your retirement savings.
Once you have an idea of how much income you’re likely to have in retirement, Media Super’s retirement spending calculator can show you how long your money could last. With careful planning and the right strategy, a creative screen career can be turned into a great retirement.
Media Super Member Advice Services can help you set the foundation for a comfortable retirement.
This information is about Media Super. It doesn’t account for your specific needs. Please consider your financial position, objectives and requirements before making financial decisions. Read the relevant Product Disclosure Statement (PDS) and Target Market Determination to decide what’s right for you. Call 1800 640 886 or visit mediasuper.com.au.
United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 as Trustee for the Construction and Building Unions Superannuation Fund ABN 75 493 363 262 offering Media Super products (Media Super).