By HELEN VNUK
I don’t often think about retirement, but sometimes – when the kids are wearing me out and work is grinding me down – a retirement fantasy does creep into my head.
It involves a house by the beach, piles of books and lots of good coffee. I’m sure everyone’s got their own fantasy. But the worrying fact is that most women don’t have enough superannuation to retire comfortably. That means the reality could end up being more like a cold, damp flat, daytime TV and instant coffee.
If you want to take control and achieve your life goals in retirement, Financial Adviser Sandy Wilson has some advice on how to do it.
1. Focus on owning your own home.
When you’re young, saving for a house deposit and then paying off the mortgage tend to be your priorities. That makes good financial sense.
“There’s no tax benefit in having a mortgage for your primary residence,” Sandy points out.
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2. Start contributing to your super as early as you can.
You might not have much money to spare at the start of your working life. But if you can afford to contribute even $10 or $20 a week to your super, do it.
“The further away you are from retirement, the more compounding interest will be your friend,” Sandy says.
3. Look at investing.
You don’t have to be a hotshot driving around in a sports car to buy shares. You can get started with as little as $500 or $1,000. If you’re confident about investing directly in the share market, you can do it online through a bank. Otherwise, you can go to a sharebroker and get advice. If you don’t have a lot of money to invest, another option is managed funds. That way your money doesn’t all go into one or two shares.
Sandy says shares and managed funds can be good for people in their 20s and 30s, who might need to access their money in a hurry. “Younger people may prefer not to have all their investments locked away in super or in property,” she adds.
4. Don’t miss out on super just because you don’t have an employer.
If you’re self-employed, Sandy advises that you should be making your own contributions and claiming a tax deduction. Meanwhile, if your spouse is working and you’re not, or you’re earning less than $13,800, your spouse can make a contribution on your behalf and claim a tax deduction.
5. Make sure your super is all in the one fund.
“It’s really important, because if you’ve got multiple super funds, then you’re paying multiple fees and the fees will eat away at super,” Sandy explains.
It’s not hard to consolidate your super – just go to your super fund’s website for help. While you’re at it, make sure you track down any lost super. Your fund should be able to help you do this too, or you can do it yourself. Go to the Australian Taxation Office’s website and use their SuperSeeker tool.
6. Prepare yourself to work beyond your late 60s.
If you were born after 1965, you won’t be able to get the pension until you’re 70. So if you’re depending on the pension to get by, you’ll just have to keep working. That means keeping your skills up to date, and staying in good shape physically.
“Your health becomes something that you need to really take care of,” Sandy points out.
7. Check that your super is in the best fund for you.
“Look at fees that you’re paying,” Sandy suggests. “With an industry fund, the fees are kept to a minimum and there are no fees paid to financial advisers. An industry fund is something that I think most people should look at.”
Retirement can seem a long way away when you’re in your twenties, thirties or even forties. But just a little bit of planning now can make a big difference later on.
How would you like to spend your retirement?
We bet these billionaires aren’t too worried about a comfortable retirement…
9 in 10 women* won’t have enough super to retire comfortably. Time out of the workforce to raise a family, working part time and earning an average of 17%^ less than men can all play a part. The good news is HOSTPLUS can help you improve your situation and take control now.
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Top Comments
There are some fantastic financial advisers in Melbourne. A great place to start is to look at who has won awards for excellence in advice. http://www.afafemaleadvice.com
There are adviers from all around the country who have won or been a finalist for this award.
Ive been wondering for awhile now if its worth seeing a financial advisor. Im only 25 but I am still basically living paycheck to paycheck, and I have grand dreams of owning a modest but modern and well decorated house, and sending my future kids to the same school I went to (which happens to be an expensive private school). With a boyfriend hinting a wedding may be as close as 18 months away, and a mutual agreement that if nature allows, we'd like to have a couple of kids before I'm 30, Im starting to realise I really need to get my shit together. Anybody reccomend this and if so, suggest someone to see in Melbourne?
Well if you went to an expensive private school, perhaps your parents can suggest something. Sounds like they had it together.
If I had the ability to do that Im sure I would have the information by now - and just because people send their kids to private school doesn't mean they were rich or financially savvy. There are things called scholarships. Its not particularly pleasant to have nobody to ask this advice of, should have counted on the internet to make me feel even shitter for daring to put it out there.
Just a suggestion because I didn't have any other advice to give. Some people don't think of going to their parents for advice, so it was plausible that you hadn't considered that. Sorry that you're not able to.
Yes - see a financial advisor. I can't recommend anyone in Melbourne, but I would be looking for someone who doesn't have a vested interest in a particular set of financial products. We saw someone many years ago who recommended a particular set of managed funds, and talked us out of property investment (right before the boom :( ) The managed funds were duds, and while we didn't lose much money (having cut our loses right before the gfc) we would be in a much better financial position if we had received impartial advice.
Perhaps see a financial advisor at your bank as a first step.
My advice (with no finance background whatsoever) is simply to stop living pay check to pay check. Work out a strict budget and stick to it so you are spending less than you earn. Pay off any debts (credit cards etc) with the extra, and as soon as you are debt free start putting that extra into a short term deposit -preferably for a house deposit rather than wedding expenses ;)
Don't even worry about the private school thing yet ... Depending on the school you may need to book them in at birth, but given that's a few years away just focus on the house first. You'll know by the time you have kids whether private schools will be viable once they hit highschool age. (We can't afford private schools and a mortgage, but our kids are doing fine in the state system).