Money management is something most of us could be better at. Whether it's bad budgeting or unclaimed superannuation, there's probably a mistake or two that you need to rectify immediately. This infographic looks at the often painful money lessons we learn during life's journey: from "young and single" to "empty nester".
Tagged With retirement
One of the best things about employment in Australia is superannuation. Under current laws, employers must pay 9.5% of your salary into an approved fund that is set aside for your retirement.
But with the age at which you can get the pension rising from 65 to 67 over the next few years, many people having larger mortgages than ever before, and life expectancy increasing, the amount of money needed to live comfortably after leaving the full-time workforce is a challenging question. So how much money do you actually need at retirement?
"I don't trust investing," a friend said once. I asked her why. "Isn't it kind of like playing the lottery?" she asked. Investing is intimidating enough for people as it is. Toss in something as unpredictable as cryptocurrency, and people give up on it altogether. It reinforces the notion that investing is like buying a bunch of scratchcards.
When you first start out in the workforce, superannuation doesn't seem particularly important. It's something that only affects you at retirement age - which isn't something the average twenty-something likes to think about. Fortunately, preparing for this far-off future doesn't take much time or wherewithal - and the benefits can be significant.
It's never too early to think about retirement - especially if you're planning to escape the rat race while you're still young enough to enjoy it. Unfortunately, if you're not a canny investor and don't have a fat inheritance coming, the only option is to build a financial nest egg out of your disposable income.
The majority of full-time workers spend a whopping 70 per cent of their salary in three key areas. If you want to start saving for retirement, these are the things you need to cut down on.
Most people have a hard enough time envisioning retirement at all, much less early retirement. Despite that, many workers have managed to quit their jobs and achieve financial independence by age 40 or even younger. Sipping drinks on the beach all day at the ripe old age of 30 sounds incredible, but there's a downside to it, too.
One of the most powerful concepts I've ever come across in my years of studying and thinking about personal finance issues is the concept of the "future self". "Future self" is pretty much exactly what you think it is: It's you at some point in the future. It's not an optimistic version of your future or a pessimistic version of where you're headed, but instead it's as realistic as you can possibly make it.
I had a great lunch today with an old friend of mine. We used to work together and he was a couple of decades older than I was, so today he's actually starting to see retirement on the short term horizon. He was interested in what my life was like as a self-employed person who made a living on a mix of side gigs and contracts, and I shared some of my thoughts on that, but when we got down to the real meat of the conversation, it seemed like he was mostly trying to figure out what the next stage of his life is going to look like.
If you can swing it, paying off your mortgage early sounds like a smart enough idea. But some prefer to invest rather than throw cash at outstanding, low-interest debt. The idea is, if your debt's interest rate is lower than your investment return, you come out ahead. Here's a simple way to decide if this route is right for you.
There are a lot of ways to calculate how much money you need to save to retire. Once you reach retirement, though, a lot can influence how long that money lasts, including the year you retire.
Watching the sunset on the beach every day. Doing a cross-country road trip whenever you feel like it. Finally devoting time to that hobby you've been dreaming of turning into your full-time gig. If you're like a lot of folks, one or all of these are something you want to do in retirement someday. And to help turn these visions into reality, you're probably contributing to a superannuation, hoping that compound growth will help you build a nest egg sizable enough to make those dreams come true.