Jul 10, 2021  | Tags: retirement

Our insights

As retirement age looms, it may seem daunting when you realise you’re not as prepared as you should or could be.

But all is not lost. The best time to start retirement planning is right now, no matter where you’re at. Even if you're late to the party, getting started now is better than not at all and you’ll be surprised what can be achieved in even a short amount of time.

So what should you do? 

Start saving ASAP

This sounds like common sense, but the first thing to do is evaluate how you’re spending your money each week. Consider expenses that can be cut back or cut out completely. There are elements of day-to-day life that add up over the weeks and years, like the daily coffee or tea. It only seems like $4 a day, but in reality, that cost adds up to be an expensive habit. 

Going through your subscriptions is also beneficial because you can cut out things you don’t utilise often. Magazine, newspaper or television subscriptions are easy to get into, but they’re part of the set and forget culture, so have a look at your bank statement to see what’s coming out regularly and ask yourself, do you really use it enough to justify the cost?

As you lean up your life with retirement closing in, priorities saving ahead of other ‘nice to have but not essential’ expenses like holidays, dining out and other forms of entertainment.

Obliterate debt

Debts are sneaky enemies that quietly erode our retirement savings. The interest on those repayments is money that could be put away into savings or investments.

The obvious debts to pay off as soon as possible are those with high interest rates, especially credit cards. Then there’s other loans that aren’t contributing to any form of investment at all, such as cars and personal loans. 

Then consider your mortgage. This is something that you don’t want hanging over your head in retirement. How far away are you from paying off your home loan, and can you accelerate this process? Can you get a better finance deal? Can you downsize and take a chunk out of your mortgage? Get professional advice about the best way forward for you, depending on your situation and goals. 

Increase your super contributions

Adding more to your super and boosting your nest egg is an important way to prepare for retirement. There are ways to do this such as sacrificing some of your salary through your employer, and adding in a little extra money on top of what they’re already contributing to your super. This also saves on income tax and turns your money into a tax effective investment. 

You can also do tax deductible contributions to your super, where you voluntarily add after-tax dollars. 

Can you start a side hustle?

We live in a world where it is easy to create additional revenue streams, through many different avenues. It could be an online business, selling your own handmade products, teaching an instrument or another unique skill, or even doing some night or weekend work.

There are opportunities to gather extra pocket money for just about everyone and even if it’s only small, it’s still a contribution to your retirement and will enable you to live a more comfortable lifestyle.

Work longer

The one we all didn’t want to hear – you could work longer. Working longer by postponing your retirement has been the most common methods of increasing funds for retirement. 

And it might only require another couple of years to get you to the level of savings you need. Or maybe you can scale back to part time and transition into retirement. 

What next?

The positive thing is you have options, irrespective of where you’re at in retirement planning.

But it’s clear you need a strategy.

Talk to the team at Calder Wealth Management. Call us on (08) 8373 3333 to schedule your free initial appointment. 

Written by Aaron Doig at Calder Wealth Management. 

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstance or seek advice from a financial advisor and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.