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Get On Top of Your Super Savings: Tips for Each Decade

Article By Adam Camac | | Financial Planning

Whether embarking on your professional journey or approaching retirement, now is the perfect time to lay the groundwork for a secure, post-work life. Our decade-by-decade guide is designed to shape your superannuation strategy, ensuring a retirement filled with comfort and financial stability.

With Australians experiencing extended lifespans, your retirement could span numerous fulfilling years. Yet, it’s crucial to recognise that maintaining your standard of living throughout retirement requires around two-thirds of your pre-retirement income – an impressive nest egg indeed!

Given the significant role superannuation plays in funding your retirement, it’s wise to prioritise its management throughout your working years. Regardless of your age, the proactive management of your super is an investment in your future that can never start too early or too late. Let’s delve into specific focus areas for each stage of life.

In Your 20s

Entering the workforce in your early 20s presents a prime opportunity to establish the fundamental building blocks of your super. Here’s a roadmap for this pivotal decade:

  • Selecting a Superannuation Fund: With ample years before accessing your super (usually from age 65), consider embracing higher risk investments. This extended investment horizon allows for recovery from market fluctuations. When choosing a super fund, evaluate risk tolerance, fees, and investment transparency.
  • Consolidating Your Super: If your early career involved multiple part-time or casual jobs, you may have accumulated various superannuation funds. Simplify by consolidating them into a single account using the ATO’s online services through your myGov account.
  • Boosting Your Super: Given the extended timeframe until retirement, consider salary sacrificing extra income, bonuses, or tax returns into your super. Compound interest works in your favour, significantly increasing the value of funds invested in your 20s by the time you retire.

In Your 30s

This decade marks significant growth in your superannuation. Rising income and employer-sponsored contributions can substantially enhance your super balance:

  • Super Health Check: Assess the performance of your super fund and ensure it aligns with your goals. Utilize tools like the YourSuper comparison tool on the ATO website for performance benchmarking.
  • Review Investments and Insurance: Collaborate with a financial advisor to refine your investment strategy. Additionally, prioritise personal insurance, especially as major life events unfold. Obtain cost-effective insurance through your superannuation fund.

In Your 40s

With retirement becoming more tangible, focus on debt reduction and securing your super balance:

  • Super Balance Assessment: Determine the necessary super amount for retirement and evaluate your current trajectory. If needed, make extra payments and consult with professionals to refine your investment strategy.
  • Manage Peak Earnings: As earnings peak between 45 and 54, balance increased income with potential higher expenses. Live within your means and allocate additional funds to retirement savings, considering unforeseen costs.
  • Active Super Management: If you’ve taken a career break for family responsibilities, proactively manage your super upon returning to work. Offset gaps with salary sacrificing and lump sum contributions to bolster your super in later years.

Remember, your retirement security lies in actively managing your superannuation throughout each life stage. Seize control of your financial destiny and contact your Altitude Adviser today to discuss how we can help with your overall superannuation strategy.

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