It’s a consistent sentiment expressed by many recent retirees, and something we as financial planners hear from many new clients: “I wish I’d started sooner.” While it’s not always easy to find the money to boost your super, there are still things you can do sooner rather than later to improve your retirement. In this article, we explore the benefits of starting early, and discuss some actionable steps you can take today that will make a meaningful difference tomorrow.

Engage with your Superannuation

Start by delving into the world of your superannuation. Ask yourself questions: Where is it? How does it work? How is it invested? While these may not seem pressing in your youth, the earlier you engage and show interest, the sooner you can shape the destiny of what is often your most substantial investment after your home. As we’ll soon discover, investing a little time today can yield significant benefits tomorrow.

Do you have multiple accounts?

Consider consolidating them into one – they most likely each have fees as well as insurance premiums that can act as a handbrake on your growth.

Invest for growth

When planning for retirement, it’s crucial to understand that two key factors influence your future financial security: contributions and earnings. While contributions represent the fuel, earnings act as the engine powering your retirement savings. Your investment profile, specifically the allocation of your assets in long-term growth vehicles like shares and property, plays a pivotal role. While defensive assets like cash and bonds can provide stability during market volatility, it’s the robust, compounding potential of growth-oriented markets that often deliver the most substantial long-term returns. So, if time is on your side and you can weather occasional market fluctuations, prioritising growth-oriented investments can significantly pay off in the years to come.

Unlock Government incentives to Boost Your Super

The government offers several avenues to supercharge your superannuation savings. First, there’s the government co-contribution, which partly matches your personal contributions, providing a 50 cent bonus for every dollar you contribute, for individuals earning under $58,445. If you have a lower-income spouse (earning under $40,000), the Spouse Contribution Tax Offset can reward you with a valuable tax rebate when you contribute to their account. Additionally, consider Salary Sacrifice—a highly tax-effective method to increase your contributions. It’s worth noting that the impact on your take-home pay is often significantly less than the amount redirected into your superannuation by your employer. Keep in mind that there are limits for each of these options, so it’s wise to seek advice or conduct thorough research before making any commitments.

Start with small steps

If you find yourself with a tight budget and have been postponing additional contributions to your superannuation, remember that even a small extra amount can wield substantial power over time. Starting with an extra 1% of your salary at an early stage can be virtually unnoticeable in your day-to-day expenses, yet it has the potential to accumulate into a significant boost by the time you retire. In fact, it might even shorten the timeline to your retirement by a year or more!”

Plan it out

Consistently, professional advice has proven to be a game-changer in people’s financial journeys. Crafting a holistic plan that encompasses wealth accumulation, home ownership, and the eventual transition from work becomes far more manageable when guided by an experienced expert.

Even if you lean toward a do-it-yourself approach, setting clear financial goals and developing a structured plan is a superior alternative to overlooking your superannuation entirely. Don’t allow the regret of saying “I wish I’d started sooner” to become a part of your financial narrative. Take proactive steps today to shape a brighter financial future.

For advice or assistance on formulating your plan, contact AGS Financial Group today.

Published : 11 Oct 2023