What you’re essentially doing before retirement in your “super phase” is having your employer contribute your superannuation, possibly top it up yourself with a sweet tax benefit, then letting time and compound interest do their thing. Then, once you are eligible to access your super, you switch it up to “pension phase” and access your money tax free.
I’m sure we can all agree that when you are 18-24 the thought of saving money in a fund you can’t access until you are 60 seems a long time away. At the age of 18, turning 30 is a long time away let alone 60. Engaging young people with their super is definitely worthwhile. These tips will help you get started.
Inflation is the “time cost of money” and means that the ten dollars you have in your pocket or on your tap and go card will buy you less in the future than now. Inflation will erode your retirement savings if you don’t take it into account today.
One of the most common questions I get asked is about comfortable retirement. Most people want to know “how much do I need?” and whether they will be OK or not. Thinking about the future can be overwhelming, especially when you have so much on “right now”. However, I actually think it’s quite simple to answer these questions. When I look at retirement with clients, I can give a fairly accurate answer which will let you know how much money you need when retired, to live the life you want.
The most pertinent thing to do right now is to consider your existing risk profile. Consider the issues and unknowns, revisit your goals and objectives, reflect on your investment timeframe and weigh up some best/worst case scenarios. Then position yourself in case a storm comes through.
When investing it can be OK to ride a skateboard down a steep slope. But if you’re going to do it, it’s good to fully appreciate the risks and it’s probably best to avoid it as you get closer to retirement!
It’s hard to get started and it’s hard to stay the course.
Savings are a good example.
Here we look at why we need to keep our eye on the end goal and not get disheartened.