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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Wealth, Retirement - 6 min read
Looking for inspiration for saving for your golden years? We’ve put together ten savings tips that will help you to enjoy your retirement, account for growing aged care costs, and look forward to the future.
1. Start Salary Sacrificing Early
The more money you have in your super when you’re young, the longer it will have to grow before you need to rely on it during your golden years. Yes, it’s a sacrifice to put that money away when there are so many things you could use it for now, but the decades of compounded growth more than makeup for the sacrifice. The tax benefits help also!
2. Minimise Your Fees
Minimising your super fund fees can make a big difference in the long run. If you have more than one super account because you have worked for more than one employer, you can consolidate your accounts so that you’re not paying multiple sets of fees.
3. Create a Plan With Solid Goals
Enjoying your golden years will be easier if you have the assurance that you’ve saved enough money for retirement, but how will you know if you don’t have a plan? Create a written plan with firm goals and then work toward your goals. Your plan should include a set amount you’ll need to save for retirement along with strategies and goals for saving that amount.
4. Keep Your Hands Off Your Savings
There are times in life when it’s very tempting to use your retirement savings. Paying for education, a new business start-up, or emergencies can lead you to want to use your retirement savings, but don’t. Avoid putting your retirement savings in a savings account where you can easily access it. It will be much safer in your super account where it will grow interrupted until it’s time to use it.
5. Double Check Your TFN
If your super fund doesn’t have your TFN, your pre-tax contributions will be hit with a penalty tax, and you also won’t be allowed to make after-tax contributions. If this weren’t bad enough, you’ll also be excluded from the co-contribution scheme. Therefore, it’s imperative that you check to make sure your super fund has your TFN (tax file number).
6. Make and Use a Budget
If you don’t see how you’re going to be able to increase your salary sacrificing at this point, you might want to sit down and create a budget. Most often, when people record all of their spendings, they can see places where they can cut back. Even if you reduce spending just a little, you’ll be able to increase your salary sacrificing and grow your super fund at a quicker rate. Every little bit helps.
7. Consider Making After-Tax Contributions
After-tax contributions (also known as non-concessional contributions) can be a great way to save money during a year when you have extra income. The annual non-concessional contributions cap is $180,000*, and you can contribute up to two years of contributions in a single year.
(*Under proposed budget measures, from 1 July 2017, this non-concessional cap will be replaced by a lifetime cap of $500,000. The lifetime cap will be assessed on al NCC’s from 1 July 2017).
8. Talk to an Adviser
Sometimes you’re too close to a situation to be able to look at it objectively. This is when it’s great to have the outside opinion of an expert. Taking the time to sit down with a financial adviser to take stock of your current financial state and where you want to be by retirement can be immensely helpful.
9. Start Today
Everyday you are one day closer to retirement, so make every day count. Starting today, work assiduously toward saving for your golden years. Save money where you can, and invest the rest. You’ll be glad you did.
10. Make Saving More Important Than Spending
This can require a major shift in perspective. If you find yourself in the trap of always buying the newest gadget or the trendiest clothes, try to lift your vision and look at the long-term instead. You can stay focused on your long-term goals by reading your super statements and taking pride in your growing balances. You can also take pride in living a good life without spending a lot of money.
For more information about saving for your golden years, contact us at Altus Financial. We’re here to help you achieve your goals.
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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