Are you fantasising about living a life of luxury when you retire?
Whether you’re in the prime of your working life and have a long way to go or retirement is a part of your 10-year plan, planning should start well before your last day on the job.
Here are our top tips to help you transition into a smooth retirement no matter where you’re currently at in your working life:
20s to 30s
There is a school of thought which suggests purchasing a home is one of the smartest strategies to set you up for future retirement.
If you’re renting and wondering whether you should try to achieve the Australian dream, seek the advice of a financial planner for advice suited to your individual circumstance.
No matter if you’re renting or owning, the best thing that everyone can do for their future selves is evaluate different super accounts and find one that is low cost, with the right asset allocations.
While more than half of Australians live day-to-day without much notice of their super account balance, it pays to do your research on superannuation. In fact, by consolidating your super accounts and switching to one with low fees and a higher return, over your working life you could be adding thousands to your savings account to access in your twilight years.
Superannuation isn’t an investment, but a trust that holds your investments in certain assets. Which assets are up to you – and that’s why it’s advised to seek expert help when choosing the right super for your needs. You should also discuss with your financial planner how voluntary repayments in addition to your employer’s contribution can boost your retirement savings.
40s to 50s
Now is the time to be proactive and transform your vision into a reality.
Set a goal for the exact age that you want to retire and consider what steps you can do now that will set you up for your future success and make your dream retirement plan possible.
Ideally, you should have your home loan paid off when you start to plan your retirement. So, if you still have an amount owing on your asset, your primary focus should be making extra fortnightly repayments to pay down your principle. Do some research on how you can use your income more wisely to pay off your debt sooner and engage a financial planner for their expertise – your efforts could save you years and thousands of dollars in interest off the life of your loan.
While you’re in planning mode, consider whether you should be making personal deductions from your income towards your future savings or even using the advantage of salary sacrificing to build your nest egg. If you decide to salary sacrifice into super you will need to ask your employer to redirect a portion of your pre-tax pay to your super fund.
Retirement planning can be intimidating – the reality is it’s likely you’ve never spent a long period of your life without bringing in some form of income and you may not know how much you’ll need to put away to live comfortably.
The experts at Inovayt Wealth have helped a number of people to prepare and plan for retirement and manage and grow their superannuation. Discuss your long-term plans with our friendly team by booking a free meeting today.