Many people say that you should start saving for retirement as soon as you start working. However for those of us who are relatively new to the work force, they may believe that there’s plenty of time to think about it! But when it comes to superannuation in Australia, it is generally accepted wisdom that growing it as early as possible greatly helps to boost retirement income by simply giving it a lot more time to grow.
Do you know salary sacrificing?
This allows additional contributions to your super before tax. In this way, you will be able to grow your super fund while paying less tax because of the lower taxable income.
But how do you motivate yourself to do this? Here are some things to have a think about:
Set a retirement goal
Do you want to maintain a certain lifestyle in retirement? Have a goal in mind and take steps to achieve it. If you want to know how much money you need to save to provide yourself with a certain level of income which meets these, you can use a superannuation calculator to give you some estimates.
Manage your finances
Know how much money you have now, where it goes, and where will you earn money in the future. Knowing where you stand now financially will help you decide on what the next steps should be. You can improve your spending habits by reducing your expenses every week so you can have more money to be saved for your retirement.
Have a diversified investment portfolio
Understand salary sacrificing and contribution limits
Do you know about salary sacrificing? It allows you to contribute extra money from your pay (before you pay tax on it) into your super. Limits do apply, but by doing this, you can grow your super fund balance faster while probably paying less tax than you normally would.
Delay full retirement
If possible, work longer. It may not have been the first thing you would have thought about in this list, but when it comes to retirement, delaying it provides benefits like keeping your mind and body active. It might even give you an opportunity to try working in a role that you’ve always wanted to.
Combine your super accounts
Consider combining your super accounts into just one account to save on fees and charges. It also makes it easier to see your super’s performance over time, by looking at just one statement.
Do you have other ideas on using superannuation in Australia to help boost your retirement income? Share your tips in the comments section.