Whether it is planning for retirement, buying a new home, deciding what school to send the kids to, what job to take, or where to go for holidays, there are simply numerous variables that need to be taken into account.
For many of us, retirement will last for 20 to 30 years, so getting it right becomes very important indeed.
The short and simple answer to the question posed is ‘as early as possible’. Retirement planning is something we should start to think about as soon as we start working.
I am not saying for one moment that retirement should be at front of mind for a 25-year-old, however a couple of simple steps put into action very early in working life, that form part of a ‘set and forget’ strategy, may be the difference between a bleak or a comfortable retirement.
Superannuation is the Government’s preferred retirement savings structure, and it provides for some very attractive tax benefits.
Employers currently contribute 9.5% of their employee’s salary to super and many employees think that is enough, particularly as this will increase to 12% over the coming years. But will that be enough?
I have always held the view that, coupled with the good and robust investment of superannuation savings, in a low-cost super fund, extra money should be contributed to super. And what is the magic number?
If someone were to have somewhere between 15% and 18% of their salary contributed to super over their entire working life, their accumulated super at retirement would have a significant impact on the type of lifestyle they can afford in retirement.
Source: Peter Kelly | Centrepoint Alliance