Many of our new clients come to us with around $700,000 in assets and about ten years left of their working lives. Their goal is to make sure they have enough money in order to live a good lifestyle during retirement. The first question we ask them is: how much money do you spend now? This is important, because we find that nobody wants to downgrade their lifestyle once they retire. So, to know what you need in retirement, first work out what you need right now.
We find that tax deductions are often the least understood area of finance. People often spend money simply because it’s a tax write-off. But what they don’t consider is whether that expense will help them in some way in the future.
In the previous blog, we looked at the ‘profit first’ theory which is the same as ‘paying yourself first’. This means putting money into your superannuation fund from your pay check before you spend money on anything else.
A major part of pre-retirement planning is focused on growing or increasing retirement savings using available cash flow. Two of the main ways to do this include paying down debt, or contributing to superannuation. To compare these properly we need to look at all of the factors that will affect this decision, such as:
For most people, the contributions they receive to their superannuation fund from their employer will make up a significant portion of their retirement savings. Which makes recent research from Industry Super Australia and Cbus Super even scarier to think about… they found that employers across Australian have kept $3.6 billion per year in super entitlements from 2.4 million workers. This is around a third of all employees in Australia!
Dallas Davison, Michael Hogue and Ali Hogue.
Money Over 50 Financial Advisers
Tel 07 4772 0938
45 Ingham Road West End Townsville Qld 4810
Money Over 50 Financial Advisers Pty Ltd ABN 26 146 225 505, 45 Ingham Road, West End Queensland 4810 is the holder of an ASIC Australian Financial Services Licence (AFSL) #471826.
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