Most kids can’t wait to grow up – the day they’re finally able to call the shots and spend their own money.  Do you remember?  At the time, it feels like a distant unreachable oasis.  But childhood seems to pass in the blink of an eye, and without warning, you’re an adult.  You get a job and pay the bills.  After a while, it dawns on you – you should perhaps start saving for the future.  I mean, one day – somewhere way down the track – you’d have to retire.  But if history is anything to go by, retirement will creep up on you sooner than you think.

So, don’t leave it all till the last minute only to realise you could’ve perhaps better prepared for your golden years.  The sooner you start planning for later life, the more likely you’ll be able to afford the lifestyle you want.

Saving enough for retirement may feel a little overwhelming, especially if you don’t have a solid strategy.  So, let’s break it up into life stages to work out what you need to consider as you go along.

 

30 or more years to go

Start making a plan.  Work out exactly how much you have, the sort of returns you want from your investments, and ultimately – how much you want to have in your nest egg at the end.  Put aside what you can.  Even if it doesn’t seem like much, every cent counts.  Then get into the habit of increasing your contributions once you have more at your disposal.  Shop around, and find a fund that provides the best benefits and structure for your goals.  It’s a good time to seek financial advice to devise a suitable investment strategy.

 

20 years to go

At this stage, the focus should be on building your nest egg by increasing contributions to your fund.  You should also consider re-organising any outstanding debt to free up some more breathing space later on.  The more money you can put aside at this point, the earlier you may be able to retire.  Higher taxpayers may wish to consider salary sacrifice arrangements to provide an extra boost to their super.

 

15 years to go

Now comes the time to thoroughly review your retirement plan.  Ask yourself – if you retired tomorrow, how much income would you need.  Is your assumed growth rate still on track?  Or are you left with less than you thought?  Don’t worry – you can update your plan each year, in line with life’s twists and turns.  Continue to pay as much into your superannuation as you can.  It’s also advisable to draw up a will if you don’t already have one or revise it if you do to ensure your funds are passed on to the correct parties.

 

10 years to go

With just a decade out from retirement, determine whether you might still have multiple super funds.  Although it’s advisable to consolidate your super into one preferred fund as soon as you can, you may have accumulated contributions of which you weren’t aware.  The ATO can help you with this.  Not only do you save on fees, but you also lower your level of risk.

 

5 years to go

You should adjust your investment risk according to your stage of life.  Volatility can be worth your while when you have more time on your side, but it’s best to avoid taking on too much risk that could end up jeopardising the gains you’ve made.  At this point, you should also start thinking about whether you may wish to draw down your superannuation while you keep working part-time.

 

1 year to go

Now you need to get serious about sorting out how much you can afford to withdraw.  There are various ways to access your income, so it would be prudent to examine your options. A financial advisor can help you work out the most tax-efficient way of drawing down your retirement income.

 

By the end of this countdown, you will hopefully be able to launch yourself into a comfortable retirement.  The sky’s the limit!

If you’d like further assistance with your investment options, give us a call.