5 steps to being financially secure in retirement
- WYZA Life
The leap from work to retirement is an exciting time, and you can finally have the chance to sit back and enjoy the fruits of your labour. Financially this transition can seem daunting, but by following these 5 steps you can move forward knowing you are financially secure.
- Pay of your debts - quicker
Retirement should be about living worry free, so do what you can to minimise your debts. Start with those building due to high interest and go from there. Make a plan to scratch out the credit card debt and consider however paying off a mortgage where the interest rate is lower than the returns of your superannuation may not be the wisest. You super could grow faster than your mortgage reduction. At retirement, cash out your super to pay out your mortgage.
- Create a budget
You want to relax and enjoy your retirement, so your finances need to outlast you. As you may have done with your salary, make a short and long term budget for your retirement. Consider the everyday necessities and the bucket list items which may require more finance.
- Maximise your superannuation contributions.
Make sure you are topping up your concessional contributions to super. The upper limit for this type of contribution is $35,000. Deduct the Superannuation Guarantee Contribution your employer is obliged to make from $35,000. The result is the amount you can salary sacrifice. It is never too late and could save you a lot of tax.
- Protect your savings – look to growth strategies
Once you’ve set money aside foryour retirement, don’t touch it. Let your savings build up so you have financial assurance in your post-work life and keep yourself from dipping in to the account to ensure you remain in the black. If you need to access your super in the transition to retirement, you can talk to a financial advisor about the federal government’s TTR strategy, which allows you to reduce your work hours and still get paid a full time wage.
- Get healthy now
Getting healthy now – losing weight and raising your fitness levels could save you a huge amount of medical expenses in the future! Good health equals enjoyable retirement – longer.
How do or did you prepare for retirement? Join the discussion below.