When you’re young you think you’re going to live forever. Retirement is the last thing on your mind. But it should be the first.
To have a ‘comfortable’ retirement a couple needs an annual income of $55 000 a year, after income tax. You’d need to have at least $1.1 million in your superannuity to reach this. Relying on the compulsory superannuation contributions your employer is legally required to make won’t put you in that ‘comfortable’ bracket. 73% of Australians believe they won’t have enough to retire on.
A lot of people think that if they earn a decent salary they will be able to put enough aside for retirement. But it doesn’t matter how much you earn, it’s how early you start to save that matters. Compound interest is what your retirement is founded on. And the earlier you can start accumulating that interest the better.
The laws keep changing about when you are allowed to access your superannuation, so unless you have funds outside of your superannuation retiring early will be difficult. The amount you’re allowed to invest in your superannuation is also limited, especially as you get older. The government has these restrictions because the investment earnings in superannuations are tax-free. But tying up all your savings in a superannuation too early isn’t wise either. You may want to buy a house and you’ll need available capital to do that. Owning your own home when you retire plays a big part in the comfort level of your golden years. We can show you how to plan now and maximise your finances for a better retirement.