Do you know how much money you’ll need to retire?
How to calculate your superannuation target
You’ve probably seen the media reports debating the magic figure of $1 million as the superannuation balance needed to fund a comfortable retirement. Debate continues whether this is an outrageous myth designed to put fear into Australians or a conservative benchmark.
But, whichever side of the argument you believe, there is one indisputable fact: women in particular need to take a more active role in managing their superannuation goals. On average, women have half the superannuation balance of men and with longer expected lifespans, need to stretch that often-meagre money even further.
Will you have enough money to retire on? #superannuation #property #investment
Knowing your goals allows you to take action
Everyone’s retirement goals are different. If your ideal retirement is to live in a home you own, covering your day-to-day living costs, and maybe treating yourself to the odd dinner out at the local club, then your financial needs are going to be different to someone who wants to travel overseas extensively each year, finance the education of grandchildren and live in a beachside house. There’s no right or wrong retirement goals to have, but there’s no point in wanting a certain lifestyle that you have no hope of realistically financing.
It’s a good idea to start by determining your current living costs and where your money goes. The government website www.moneysmart.gov.au has an excellent budgeting tool to help you determine your current spending and get a clear picture of where your money goes. Be sure to look at all the money coming in and going out across a whole year to take into account things like annual insurance payments, housing costs, utilities, transport costs and more.
Once you know what you’re currently spending, ask yourself some serious questions about whether you’re prepared to make lifestyle sacrifices in your retirement. What ongoing costs are you likely to need to cover? If you don’t own your home, how much money will you need to set aside for rent? Do you have ongoing health issues that will lead to medical expenses and possibly needing in-home or out-of-home care? There is little point in anything less than absolute honesty with yourself as you go through this process.
Are you on track to fund your retirement?
Once you have clarity on your current expenses and anticipated future expenses, it’s time to take a look at your superannuation balance. What is your current balance and what is it projected to be by the time of your retirement? How many years will that allow you to live based on your desired standard of living? Is it enough?
If it’s not going to be enough, the time to take action is now. Go back to your current budget and look to see where you can trim costs. Can you use that money to make additional superannuation contributions or save that money to use a deposit to fund other investments that will over time generate income for you in your retirement?
The time to take control of your superannuation is now #property #superannuation #investment
Are you ready to take control of your financial security?
Being clear on your financial goals is the first step on the path to a comfortable retirement. At Money Factory Investing, we help women to take control of their financial security and provide guidance and support for investing in non-traditional asset classes like industrial property. Sign up below to get my free book and we'll keep you posted with details of upcoming information sessions where I share my industrial property investing secrets,
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