How to make a money saving plan for retirement
7 January 2019
Ask a worker what they’re looking forward to upon retiring and you’re going to get a range of different responses. They might want a slow-burn sunset cruise down the Seine River, or infinite time for golf – regardless of your goal, retirement has plenty of upsides.
But how can you afford all of that luxurious and well-earned downtime? With a savings plan in place, your retirement goals might be closer than you think. Whether you’re just starting out or nearing the end of your career, there are ways to stretch your money further before retiring from the workforce.
Steps for creating your money saving plan
1. Take stock of where you’re at
What’s the state of your current savings? Checking the health of your finances can help you set a course that’ll suit your retirement while also taking into consideration what you need now.
You might like to begin by setting aside an afternoon or weekend day or map out your finances. Jot down every bit of income and use your banking app to take a look at where your money is going (or pulling out that box of receipts if you prefer to keep a paper trail). Listing the comings and goings of every dollar puts you in a better position to start planning for what’s to come.
Ask yourself: ‘What’s the big picture?’ While you won’t necessarily know exactly how much you’ll for retirement, having a clear road map of where you are is the first step.
2. Play with ballpark figures
While there’s no easy solution for figuring out how much money you’ll need for retirement, having an estimate is a good start. And if you’re thinking ‘superannuation will cover me’, think again. According to the ASFA Retirement Standard, to have a comfortable retirement, single people will need $545,000 in retirement savings, and couples will need $640,000.
Having a ballpark figure of your ideal retirement amount is great – but don’t forget to factor in your lifestyle and living costs as they will effect your estimate. You might start by calculating your monthly household and lifestyle expenses, such as housing, food, clothing, health, transport and other associated costs. Once you have this number, you can try Suncorp’s Super Contributions Calculator to help you determine how making extra super payments now could improve your financial situation later.
3. Kick-start your savings
There are plenty of ways to send your retirement savings skyrocketing. Opening an online savings account might be a great option for putting extra money into your super fund. A high-interest rate savings account with no account-keeping fees, such as online savings accounts or term deposits, are a smart way to start your money saving plan. Be sure to compare savings accounts to get the most competitive interest rate. But it doesn’t end there. Your money savings plan can be put it into gear with the help of financial planners, or by looking at refinancing or reassessing loans to get the best possible outcomes.
Keep an eye on your money
- Budgeting your money – The better way to save and spend
- How to save your way to 1 million dollars
- Property investment strategies: which one is right for you?
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