3 immediate changes you can make

​There are a fair few strategies that we’ll be able to use immediately with most of our new clients to help achieve their retirement goals.

3 of the easiest and most important changes that can be implemented can make the biggest difference.

Cut your living expenses by 10-30%:

• The expenses that clients truly get enjoyment out of aren’t the ones that we look to remove from your life.

 

• It’s the expenses that clients don’t get any enjoyment out of anymore, or the ones where the cost doesn’t justify the little amount of enjoyment it does bring.

 

• The more that is spent on these low benefit expenses, the less that is available to add to your retirement and to use on the things you really want to do e.g. travel.

Putting 10-30% of your wage into your super funds (maximising your concessional contributions):

• This strategy is important as it produces a tax saving (free money).

 

• Every individual has a concessional contribution cap of $25,000, inclusive of your Super Guarantee (minimum employer super contributions).

 

• On average, our new client couples will have an extra circa $30,000 p.a. of combined concessional contributions available to contribute to reach their caps.

 

• If the couple each had an income tax rate of 34.5% and decide to take this money as income, they would pay $10,350 worth of tax on the $30,000 earned.

 

• When utilising this $30,000 as concessional contributions, the money would be taxed at 15% instead, reducing their tax payable on this amount to $4,500.

 

• Not only do you create these tax savings, but you put your money in a place where it can accumulate and gain a return. You may not be able to access this money until you reach age, but the money is still yours nonetheless and will be growing.

 

• It may seem hard at first to put that money away, but once you have put this in place, you will barely notice a difference.

Looking at your superannuation investment strategy:

• Having your funds in a suitable investment strategy, gives your money the ability to work harder for you.

 

• The power of compounding returns will increase your retirement balance over your lifetime significantly.

These 3 changes are not hard to put in place right now and the difference they can make to your retirement will be significant. Giving up some of your income now, will give you the ability to truly enjoy your time in retirement.

​Written by Ali Hogue