Early contributions boost retirement balances

The superannuation gap of young Australians who contribute to their super earlier, compared to those who take the default contribution option has been confirmed by modelling from advice tech platform Otivo.

Otivo's modelling reported that if younger Australians (20 years old) start additional contributions to their superannuation, compared to contributions later in life (35 years old), then individually that person would have a 32% larger super balance when they retire.

More generally, however, those who make voluntary contributions to their superannuation are 15-40% better off than those Australians who don't.

Otivo chief executive and founder Paul Feeney said that innovative technology is key to delivering scalable, affordable, and accessible financial advice to everyday Australians.

"Otivo's recent modelling shows just how much starting extra super contributions early can boost your retirement savings. Consistent contributions over time can really enhance your financial security when you retire," he said.

"... our priority is to make sure that every Australian has access to the advice and tools needed to make these informed financial decisions. And when individuals are better off, the wider community is better off too.

"Super funds are perfectly placed to help Australians by offering advice at scale, using a hybrid approach that combines cutting-edge technology with traditional advice."

Separately, earlier this week, the firm launched a compliance-led Statement of Advice (SoA) tool.

Otivo said its SoA tool will reduce the time required for compliance checks, whilst also ensuring advisers can maintain high standards and satisfy obligations such as the Best Interests Duty, without compromising on speed.