Planning for retirement isn’t always easy, but it matters. It’s never too late, or too early, to start preparing.
We understand that different things matter to different people, but having a retirement plan is important for each and every one of us. And it’s not as hard as it seems – in fact, you can get started right away. Let’s take a look at how to set up a plan for retirement that will help your super savings go a long way.
When creating your retirement plan, there are three simple steps to consider:
- Set your financial goals.
- Build your super savings.
- Manage your retirement income.
1. Set your financial goals
No matter what stage of life you’re in, it’s important to set financial goals that are specific, measurable, and achievable. By writing down and referring back to your goals, you can track your progress and gain a better understanding of your financial profile. Before noting your goals, ask yourself the following questions:
- What money will I live on in retirement? Think about how long you might need your retirement savings to last. With current life expectancies, and depending on when you retire, your retirement income may need to last 20 years or longer.
- How much super will I need? Whatever your retirement plans, you’ll need money put away to meet your daily expenses, as well as any unexpected costs. How much you actually need will also depend on any outstanding debts you might have.
- Will I receive money from the Government Age Pension? Find out if you’re eligible for the Government Age Pension – but don’t rely on it as your sole income as government policies can change. Instead, use your super to top up any Government Age Pension you may be eligible for.
2. Start building your super savings
Even small savings today means you could have more for retirement down the road. To make the most of additional contributions, it’s best to think about how you add to your super – before or after tax – and not just how much.
Transition to retirement can be a great way to grow your super savings while you’re still working. Once you reach your preservation age you could:
- Access your super early
- Save tax, and
- Grow your super.
3. Manage your retirement income
When you’ve reached your preservation age and have either permanently retired or changed jobs after turning 60, you can access your super as:
And don’t forget – before making any big decisions about accessing your super, it’s always a good idea to seek help or advice.