Lately I’ve been giving my future a lot more thought than I normally would and in particular the subject of money. I don’t know whether these thoughts are at the forefront of my mind because I constantly read about countries with dreadful economies and high unemployment or whether it’s because I’m planning my own future for the next five years but either way I’ve been thinking about how much money I will need to live comfortably when I decide to retire and I’ve come to the conclusion that what I’m currently putting away is not nearly enough to live the life I have envisioned.
Like a majority of Australian’s I salary sacrifice a percentage of my paycheck each week into my super account. My super fund then invests my contributions as well as the compulsory contributions that my employer provides in various markets according to my risk option that I choose. I didn’t always sacrifice extra cash into my super fund but when it came to my attention that I wouldn’t have enough money to retire on when I was sixty I knew I needed to stop spending my money so aimlessly so I could begin contributing towards my retirement lifestyle, even if this future was decades away.
“The mint makes it first, it’s up to you to make it last” – Evan Esar
To begin with I started to supplement my super with only a small percentage of my wage each week whilst paying off some debts that I had accumulated over the years but as these disappeared I increased my contributions. Next year I hope to double these and as my pay increases I’ll increase it again and again as the economy allows.
Of course I couldn’t completely depend on this super fund to solve all my financial problems and as I’ve previously been told don’t put all your eggs into one basket so I starting reviewing my biggest weekly expenses and decided to find ways to eliminate them which forced me to look at the roof over my head. An expense that chewed into nearly a third of my wage each week but was definitely a basic necessity. If I could own this house by the time I retired then that would eliminate a huge weekly expense in my old age right there. Admittedly, I would still need to think about ongoing maintenance to the home and council rates but these would be a lot less than paying rent on someone else’s property.
It’s only a start to my retirement future but it gives me something to build upon.
What are your tips for saving for retirement? Do you feel confident in your plans?