Six tips for saving for retirement – a practical guide
We squirrel money away for all sorts of things – holidays, home renos, a new set of wheels – so why not for retirement too? With a bit of planning (and a few smart moves), you can set yourself up for a future that’s not just secure, but seriously enjoyable.
1. Start with a plan
Getting financially retirement-ready begins with knowing where you’re at now. Take a fresh look at your budget and assess whether your current path will get you to the lifestyle you want. A clear savings plan will help you work out how much you need to set aside each month, based on your stage of life and financial goals. Remember, there’s no one-size-fits-all approach – your plan should be tailored to you.
2. Make savings automatic
Once you know how much you want to save, make it easy on yourself by automating your savings. One of the best ways to do this is through salary sacrificing – contributing part of your pre-tax income directly to super, which is taxed at just 15 per cent. For those over 60, these contributions are even better – they’re tax-free. You can also set up automatic transfers to high-interest savings or investment accounts outside of super, and make sure you have an emergency fund in place.
3. Invest smartly
Super is great, but it doesn’t have to be your only retirement nest egg. Investing outside of super gives you more flexibility and control, especially if you want to retire early. A financial advisor can help you find the right mix of investments – from shares and property to managed funds and term deposits – based on your goals and comfort with risk. After retirement, it’s wise to shift to a more conservative investment approach to preserve your capital while still generating income.
4. Tackle your debt early
Debt and retirement don’t mix well. Many Australians are entering retirement with more mortgage debt than super – a worrying trend. The earlier you can start chipping away at credit cards, personal loans, or your mortgage, the better. Strategies like the debt avalanche (paying off high-interest loans first) or the snowball method (starting with your smallest debt) can help. Even switching to fortnightly mortgage payments could shave years off your loan.
5. Work your own way in retirement
Just because you’ve hit retirement age doesn’t mean you have to stop working. You might reduce your hours or take on a more flexible job. The Australian Government’s Work Bonus lets age pensioners earn up to $300 a fortnight without reducing their pension, so a little extra work can go a long way – socially and financially.
6. Don’t forget government perks
Lastly, there are plenty of government concessions that can stretch your money further. The Commonwealth Seniors Health Card gives access to cheaper medicines, bulk-billed GP visits and energy supplements. States like Queensland also offer seniors discounts on transport, rates and more.
In short, retirement planning doesn’t need to be daunting – just start small, plan smart, and make the most of what’s on offer.
