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Not retirement-ready yet? Catch-up strategies for late-starters
If you’re feeling like you haven’t paid enough attention to your retirement planning, there is still time to play catch-up – for most people. Here’s how to get started.
Let’s face it, life doesn’t always go as planned. In fact, more people than you might expect find themselves in their late 40s, 50s and even early 60s, and not having saved enough for retirement – yet! It might be because of unexpected financial setbacks or divorce, or simply because your priorities were elsewhere. If you’re feeling like you haven’t paid enough attention to your retirement planning, there is still time to play catch-up – for most people. Here’s how to get started:
Understand your current superannuation balance and how it is invested
If you’ve got this far in life, you will have likely paid compulsory superannuation contributions into at least one super fund. And you may not have paid a lot of attention to it until now. But an important step is to properly understand your current super balance, your account fees and the type of investment set up in the account. And if you have a number of funds, tidy that up.
Many people don’t realise that the balanced or default account for your superannuation fund is only one of the investment options. Depending on where you are in life and how much risk you are prepared to take, you could consider stepping it up to “growth” for a few years to maximise your compounding in an attempt to increase your super balance fairly passively.
Most funds will offer you access to a financial adviser to discuss your risk appetite and intra-fund options, or if you want to consider switching, you might want to talk to an independent adviser.
Recut your budget and consider contributing more to superannuation
The next step is to closely examine how much you need to live on, and how much you could afford to save each week or month for retirement. And to do that, you should create a household budget and look through it for ways to save. You can download a budgeting template here.
This is only part of the article. Read the rest of this article on The Age here.