SOCIAL MEDIA POST
As the impacts of Australian women’s low superannuation balances start to hit home, it’s time to be proactive and leverage your income says buyers agent Julie Crockett.
Most Australian women approach retirement with 50% less superannuation than their male counterparts and one-third without any savings at all*. It’s time to start having more female friendly conversations about ‘money’ and ‘Super’ and requires our immediate and full focus. Until the issue is addressed from a higher level, we need to be proactive about safeguarding our future, taking care from day one in the workforce to strategically manage our income.
1. Start early and get money savvy – it’s yours to decide where it goes
We know how much we earn, but do we know that the tax and superannuation paid by our employer is also ours? Every dollar of our wage – whether tax or superannuation – is ours and it’s up to us to ask questions regarding where it all goes. Become educated and understand exactly how much tax you pay, along with how much super is going into your account. You can then make adjustments that could have significant long-term impacts on your retirement funds. For example, if you consistently pay super above and beyond your employer contribution (currently 9.5% of your income), this can work in your favour. Even an extra $25 a week (less than one coffee a day) can make a huge difference over a 20 year period of time. The secret is to start contributing that little bit extra as soon as you start your full time job. That way, you will not miss the money.
2. Start when you’re young for best retirement options
From your 20s onwards, take control of where your money is spent, saved and invested. That’s right – it needs to be spread strategically so your money works for you. This will give you a head start if you take time off for parental leave, care for family, change careers or travel. Starting to save and invest in your 20s can really set you up for the future when it’s done right. It affords you lifestyle and family options that are planned for, with the finances covered. In your 20s, it’s so hard to even fathom how much money you could need in retirement., but the real value of having it locked away is that it gives you more scope for making decisions about your future, when you’ve got the leverage to do so.
3. Keep track of your superannuation balance and review annually
Superannuation is not set and forget. Again it’s your money so make decisions on what happens to it – even if your balance is held in an industry fund you can still decide how it’s invested, so contact your fund manager to discuss your options. If you have a self managed superannuation fund, get advice on how you can safely maximise the funds in your account. Do this exercise each year and watch your retirement funds grow. You have the power to make decisions about how your money is handled. Managed properly, your superannuation fund will grow exponentially over time.
4. Make sure that you get the right advice
Don’t leave your retirement to chance. Doing nothing and pretending that it’s going to be okay one day, is not okay. Taking action is better than doing nothing at all. Seek advice from an accountant, financial planner or industry superannuation representative (your superannuation fund may be able to make recommendations if you don’t know who to ask). Getting the right advice will help bridge the retirement fund gap and empower you to go ahead, regardless of your life circumstances. Don’t take it for granted that things will ‘work out’ – take control with the help of a professional and reclaim the untapped potential of your income.
5. Get long term capital growth benefits through property investment
Consider buying an investment property to make the most of your income from a bricks and mortar asset, that will provide capital growth over time. Getting the right advice is key to making wise decisions on the right investment property for you. If you’re new to investing, make sure that you deal with an experienced professional who invests themselves, rather than a selling agent whose one focus is to move property. Buying property is the first step: holding it for the next 10+ years will take a whole level of understanding regarding market fluctuations, dealing with tenants, property managers and potential interest rate rises. Working with someone like a professional buyers agent will alleviate these challenges and they’ll work with you to achieve your own personal goals.
By taking control and working through these five tips, you’ll be well-placed to move forward into retirement. Over the space of just two decades, that extra $25 a week may not seem a lot, however it can make a massive difference. Alternatively, you may be unsure of how to invest in property, but now more than ever it’s important to take action to provide for your future. Get your key advisors lined up, review your superannuation strategy annually and be proactive – your future self will thank you.