Get on the front foot of your retirement goals, by considering these tips:
While Australia doesn’t have an official retirement age, there are some factors to consider when determining what age you might stop work. You might retire when you’re eligible for the Age Pension, or when you reach your Preservation Age – the age when you can access your super.
Your retirement age might also be influenced by your profession, health, family circumstances, or individual preference. The main point to remember is, the earlier you retire, the longer you’ll be relying on your super and savings, and the more you’ll need to have saved to support you.
You could consider asking your employer about setting up a salary sacrifice arrangement for your super. You could find, depending on your salary, you may save on tax. Super is a long-term relationship – the more attention you give it, the greater the potential. Even salary sacrificing a small amount now – like the cost of one takeaway lunch a week – can make a difference to your super balance over the longer term.
Looking at how your super is invested could make a big difference to your retirement savings goals. If you still have many years left in the workforce, you may want to look at what your risk appetite is, and consider a higher risk, higher return approach to your investment strategy. A Financial Adviser could help you work out what investment strategy may suit your needs.
If you have insurance in your super, you may want to check if your cover still suits you, and your family’s needs.
No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance cover can help so that if there is an unforeseen event, you and your family can hopefully continue to move forward – and it can lessen the impact to your retirement savings.
It’s important to think about how you want to structure your time when you retire, well before you leave full-time work. It’s normal to have different views about what constitutes a dream retirement.
Think through your expectations about travel plans, making a sea or tree change and pursuing a hobby or even a new business. It’s also wise to consider whether and how you want to financially assist your children or care for elderly relatives. Or you might want to continue working part time, while balancing your other life interests. These factors should be taken into account when planning how you want to fund your retirement, as well as the type of lifestyle you will lead.
Will you be entering retirement debt-free? Repaying as much of your debts as possible before you retire, can make a big difference to your lifestyle and the funds you’ll have available in retirement. While building your retirement savings, also consider a plan to proactively clear your debt by using any free cash flow to reduce the amount you owe to strengthen your financial position. You may also want to consider any benefits gained from rolling your debts into one or using another provider that offers lower rates and fees.
This information is current as at 20 November 2020.
The article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
This article does contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, BT accepts no responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.
This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it.