August 2018
Your post-work life probably seems like a distant (or non-existent) priority. That’s normal. But when you actually get there, do you really want lifestyle or financial FOMO? Here’s how some simple planning now can make a big difference to your standard of living in retirement.
Back to square one
All financial plans start with a budget. And whether it causes eyes to roll or flashes of ‘can’t deal’ as we reach for our phones, there’s no denying it. And the best bit—it’s not as hard as we think!
Basic budgets can take as little as 15 minutes. It’s well worth the time, because they answer some important basic financial questions:
- How much am I spending?
- What improvements can I make?
- How much can I save?
A simple budget tool—like our budget planner—will help you remember the little things that mightn’t always be front of mind. With a budget in place, you’ll have a good idea of how much you can save—and you’re one step closer to charting the path to your financial future.
Sort your #postworkgoals
Make a list of financial goals you want to achieve—short-term, medium-term and long-term. Short-term examples could include annihilating existing debt, or saving up for a home. Medium-term goals could include buying a home—or if you have a mortgage, paying it off sooner—or getting onto investment plans for things like kids’ education costs. Long-term goals might include maxing your retirement savings or paying off a mortgage.
Your goals should be ‘SMART’:
- specific
- measurable
- achievable
- relevant, and
- timebound.
They’ll change over time, so revisit them regularly.
How much is enough?
There’s no one-size-fits-all answer to how much your future self will need. But research by the Association Superannuation Funds of Australia (ASFA) shows that for a single homeowner, $545,000 in today’s money is required to maintain a ‘comfortable’ retirement lifestyle—$640,000 for a home-owning couple. That’s $42,764 a year in retirement for a single homeowner. And $60,264 a year for a home-owning couple.
There are heaps of tools out there which can help you benchmark your progress towards a comfortable lifestyle in retirement. Check out our Retirement adequacy calculator or if you’re more of the competitive type, see how you’re tracking against other members of a similar age and product type with our Compare me tool.
We’ve also got a range of other online tools that can help you manage your super and provide tips on investments, insurance, contributions to super and more.
What if the worst happened?
Insurance touches pretty much every part of our lives. We insure cars, houses—even our pets! But are we under-insuring ourselves?
Bad luck with health can permanently undo our best laid plans, so it’s essential to make sure we’re covered in case you-know-what hits the proverbial fan.
These are just some simple ways you can start putting a few things in place to make your post-work life the one you always dreamed about.
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