Where do I start?

Keeping your options open – planning for your financial future.

For many Australians, retirement isn’t planned, it just happens. Unfortunately, what can go hand in hand with not preparing for your retirement is the loss of choice. When your retirement income is restricted, so are your lifestyle choices. This might mean having to work longer than you had intended, forgoing the overseas holiday, the new car, the new kitchen or the regular entertainment.

Consider these four simple steps you can take to help ensure the retirement lifestyle you want:

1. Know what you want

You need something to aim for. When to retire? Where to live? How much to live on? How will you manage the transition from work to retirement? Spend some time thinking about the choices you would like to make.

2. Matching your investments with your time horizon

Matching your investments with your time horizon is one of the secrets of successful investing. For example, short-term savings you intend to use within 1 to 2 years, are usually best held in an investment with a matching time horizon, such as cash. However, when investing for your retirement income, consider including growth assets which have a much longer time frame. Historically, growth assets like shares and property have out performed defensive assets such as cash and fixed interest in the longer term.

3. Make the most of your superannuation

For many of us, our super is our biggest investment outside our home. It pays to make sure every dollar of superannuation we have is working as hard as it can. Consider salary sacrifice and spouse contributions, which offer more than just tax advantages. In the long term, boosting your super savings will mean you will be able to maximise your retirement options.

4. Better late than never

How can you bolster your retirement savings? Consider moving your rainy day money into superannuation, particularly as you get closer to retirement. For those born before July 1960, it will be accessible once you reach 55 and retire from the workforce. In the meantime it will be growing in a tax advantaged environment.