Although you may not be thinking about your retirement yet, the reality is that every little extra you put aside now will pay off later down the track. After working hard all your life, you want to retire in comfort — that’s why you need a financial plan. Here’s five ways you can start to grow your wealth.
1. Consolidate your super
Think of your super as a long-term investment — because that’s exactly what it is. So the first thing is to avoid paying extra fees from multiple super accounts. While the fees may seem small, they can really add up over time, particularly when lost earnings are taken into account. And remember, your super not only earns you interest but saves you money on tax. That’s why it’s worth making salary sacrifice contributions while you’re working. And because these voluntary contributions are taxed at the low rate of 15%, you could come out ahead in the long run.
2. Set a financial goal
What kind of retirement would you like to have? Keeping in mind that a comfortable retirement is estimated to cost roughly $58,128 for a couple and $42,433 for a single, it’s a good idea to set your financial goals early so you know you’re working towards the retirement you want. In Australia, many people are realising later in life that they aren’t on track with their retirement savings — so act now to make sure you’re not one of them.
3. Review your investment options
To make the most of your savings, consider putting them into investments. But how can you know if you’re investing in the right places? While you’re younger and time is on your side, you may want to think about which investments are likely to give you the highest growth. Think long-term — and be willing to invest into assets like property and shares that are more likely to maximise your returns in the future. But remember, higher growth also comes with higher volatility in the shorter term, so make sure you speak to your financial adviser to understand the risks.
4. Check your insurance
You’re working hard to get your finances under control. There’s no better time to think about what a setback might mean to your lifestyle today — and your ability to retire in comfort down the track. Income protection and total and permanent disablement insurance will keep you covered if you find yourself unexpectedly unable to work. And don’t forget to secure your family’s financial security with life insurance — so you can be prepared, no matter what.
5. Seek professional help
Making the right financial decisions can be tough on your own. To find out more about how to develop and put a financial plan into action, speak to us today on (02) 9299 7044 . ASFA Retirement Standard. June 2014.