Are you retiring in the next 40 years? Roughly half of you who answered “yes” won’t have enough money to live comfortably in retirement. Many of us have a short-term orientation towards finances meaning that we consider superannuation a problem for another day. However, there are ways you can stop your current debt situation from affecting your retirement plan.
Thinking about retiring in 40 years is not something that most of us can visualise. It is too far down the track to be considered a real problem when the debt repayments due last week are more pressing in nature.
Because of this we put off doing anything about it, leaving too little time to create any real savings to live off at the end of our careers.
Look at what you’re paying for
Most funds automatically give you a death & disability insurance policy and take the fee for this out of your super when they take out operational fees.
Review the policy and shop around for a policy that better fits your needs. If you are younger with no dependants it might not even be something that you need. Taking the money you would have otherwise spent on life insurance policies and directing it into superannuation investments could be a wiser way to maximise your retirement fund.
Even when you are struggling financially, when push comes to shove most of us can spare an extra $50 a month. Making additional $50 payments into your super with the right investment strategies means that you could have an extra $175,000 come retirement.
Know what current government policies are
Even though government policies regarding superannuation change regularly is pays to stay abreast of the latest opportunities.
The co-contribution scheme is one incentive that the government put in place to encourage investing in your retirement. Find out if you are eligible for the government’s co-contribution scheme with this tool here.
Getting out of debt doesn’t mean you have to sacrifice saving for your retirement. Talk to us at Life After Debt to develop a debt solution that won’t impact your ability to save for retirement.