It’s no secret that Australians are not saving enough for retirement. In fact, a recent study found that almost half of Australians are either not saving at all or are not putting away enough to live comfortably in retirement. This is a serious problem because, without enough money saved, you could be forced to rely on the age pension which, let’s face it, is not enough to live on. So, how can you make sure you have enough money saved for retirement? Keep reading to find out.
Top Tips for Savings More for Retirement
- Start Early: The earlier you start saving, the better. That’s because your money has longer to grow and compound. For example, let’s say you start saving $300 per month at age 30. If you continue saving $300 per month until age 60 and earn an average annual return of 7%, you will have around $363,000 saved up. However, if you start saving $300 per month at age 40 and continue until age 60, you will only have around $211,000 saved up—that’s almost $153,000 less than if you had started 10 years earlier! So, if you haven’t already started saving for retirement, now is the time to do it.
- Save More Than the Minimum: When it comes to superannuation, most people just make the minimum contributions required by their employer and leave it at that. But if you want to have enough money saved for retirement, you need to do more than just make the minimum contributions. Ideally, you should be aiming to contribute at least 10% of your salary into your superannuation account every year. And if your employer offers matching contributions, be sure to take advantage of them! For example, if you contribute 10% of your salary into your super and your employer matches that with another 10%, that’s like getting a 100% return on your investment!
- Invest Your Money: Another way to boost your retirement savings is to invest your money rather than simply letting it sit in a savings account where it will only earn interest at a rate that is likely below the rate of inflation.
- Take Advantage of Government Incentives: The Australian government offers several incentives designed to encourage Australians to save more for retirement. One such incentive is co-contributions which is effectively free money from the government that goes into your super account if you earn less than $51,813 per year and make after-tax contributions from your own pocket. For example, let’s say you contribute $1,000 from your own pocket into your super account during the financial year. If you meet the eligibility criteria mentioned above, the government will also contribute $500 into your super account which effectively doubles your investment! There are also other government incentives available such as tax breaks so be sure to research these before making any decisions about how best to boost your retirement savings.
If you want to have enough money saved for retirement in Australia, there are a few things you need to do including starting early, saving more than the minimum amount required, investing wisely, and taking advantage of government incentives. By following these tips, you can ensure that you will have a comfortable retirement. And remember the most effective way to reach your financial goals is to employ a financial advisor!